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The  Empire  of  Business 


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ANDREW   CARNEGIE 


The 

Empire  of  Business 


By 

Andrew  Carnegie 

Author  of  "  Gospel  of  Wealth,"  "  Triumphant  Democracy, 
"American  Four-in-Hand  in  Britain,"  "  Round  the  World. 


New  York 

Doublcday,  Page  &  Co. 

1902 


Copyright  1902  by 
DOUBLEDAY,  PAGE  &  CO. 

Published  April,  iqoz. 


CONTENTS 

PAGB 

The  Road  to  Business  Success  3 

A   Talk  to   Young  Men 

Lessons  drawn  from  a  long  business  career. 

-  The  a.  B.  C.  of  Money  21 

Barter — ^the  direct  exchange  of  commodities.  The 
needs  and  uses  of  money.  Comparison  of  the '  two 
standards — gold  and  silver.  How  the  money  stand- 
dard  affects  the  credit  of  a  nation. 

,The  Common  Interest  of  Labour  and  Capital      71 

Employer  and  employe  interdependent.  The  ad- 
vantages of  mutual  trust.  The  employer  who  helps 
his  workmen  through  education,  recreation  and  social 
uplift,  helps  himself. 

» Thrift  as  a  Duty  95 

The  Duties  of  Rich  Men  "^ 
Thrift  an  evidence  of  civilization.     Saving  one  of  the 
highest  duties  of  citizenship.     The  accumulation  of  a 
competence  a  duty;  the  acquirement  of  vast  wealth 
not  a  virtue  but  a  great  responsibility. 

.  How  To  Win  Fortune    tf  103 

The  advantages  of  an  early  start.     College  education 
not   necessary  to   business  success.     Poor   boys  the 
,    successful  men  of  to-day.     Men  of  business  ability 
sure  of  recognition. 

,  Wealth  and  Its  Uses  7^  125  / 

Poverty  an  incentive  to  great  achievement.  Surplus 
wealth  allows  merely  an  elaboration  of  the  simple 
needs  of  life.  Wealth  helps  consolidation  and 
cheapens  production. 


CONTENTS 


The  Bugaboo  of  Trusts  153 

What  is  a  Trust  ?  Combinations  the  order  of  the  day. 
Trusts  that  increase  production  and  reduce  prices. 

Anglo-American  Trade  Relations  173/ 

Contrasting  the  commercial  methods  of  the  two 
countries.  The  part  the  tariff  plays  in  trade.  Pro- 
tective tariff  in  the  United  States;  free  trade  in 
Britain,  a  comparison  of  results. 

Business  189  / 

Business  is  a  large  word  and  in  its  primary  meanings 
covers  the  whole  range  of  man's  efforts.  The  same 
principles  of  thrift,  energy,  concentration  and  brains 
win  success  in  any  branch  of  business  from  medicine 
to  dry  goods. 

Steel  Manufacture  in  the  United  States       229 

Some  reasons  why  the  United  States  has  become  the 
greatest  steel-p  educing  country  in  the  world.  Com- 
parative costs  of  raw  material  and  manufacture  of 
steel  in  this  country  and  abroad. 

.The  Cost  of  Living  in  Britain  245 

As  compared  with  the  United  States.  The  costs  of 
the  necessities  of  life  in  England  and  America.  Why 
the  American  can  enjoy  luxuries  that  are  denied  the 
Englishman. 

Oil  and  Gas  Wells  263  y 

A  short  history  of  the  discovery  of  oil  and  gas.  The 
method  of  driving  wells  and  the  use  of  the  product. 
The  fortunes  won  on  a  small  capital.  The  possibilities 
of  its  use  in  the  future. 

The  Three  Legged  Stool  285 

Scheme  of  the  world's  work.  The  triple  alliance 
of  labour,  capital  and  business  ability  are  necessary 
to  produce  successfully.  Each  dependent  on  the 
others — combined,  invincible. 


CONTENTS 


Railroads  Past  and  Present  291 

Railroading  in  the  seventies;  rails,  systems,  speeds, 
salaries  and  methods.  Railroading  in  the  future. 
The  needs  of  the  railroad  man  and  his  responsibilities. 

Iron  and  Steel  at  Home  and  Abroad  303 

Conditions  of  the  iron  trade  in  the  United  States  and 
abroad  compared.      The  future  of  these  metals. 

The  Manchester  School  and  To-day  311 

The  British  contention  that  each  nation  is  specially- 
qualified  for  but  one  general  branch  of  industry  dis- 
cussed and  combatted. 

What  Would  I    Do    With  the  Tariff    If    I 

Were  Czar?  327 

The  advantage  of  taxing  the  imported  luxuries  heavily 
and  reducing  the  tax  on  raw  materials  and  necessities. 
A  few  striking  examples  of  correct  and  misapplied 
tariffs. 


PUBLISHERS'   NOTE 

Several  of  the  chapters  of  this  book  first  appeared 
in  various  forms  in  several  periodicals  to  which  acknowl- 
edgments are   due: 

From  The  North  American  Review 

The  A.  B.  C.  of  Money  and  The  Bugaboo  of  Trusts 

From  The  Forum 

What  Would  I  Do  With  the  Tariff  if  I  Were  Czar? 

From  The  New  York  Evening  Post 

Steel  Manufacture  in  the   United  States 

From  The  New  York  Tribune 
How  to  Win  Fortune 

From  The  Iron  Age 

Iron  and  Steel  at  Home  and  Abroad 

From  The  New  York  Journal 
The  Three-Legged  Stool 

From  The  Youth's  Companion 
Thrift  as  a  Duty 

From  The  Contemporary  Review  of  Britain 

The  Cost  of  Living  in  Britain  Compared  with  the  United  States 

From  The  Nineteenth  Century  of  Britain 
The  Manchester  School  and  To-day 

From  Macmillan's  Magazine 

The  Natural  Oil  and  Gas  Wells  of  Western  Pennsylvania 


The  Road  to  Business  Success 

A   Talk  to   Young  Men 

Lessons  drawn  from  a  long  business  career. 


THE     ROAD     TO     BUSINESS     SUCCESS 

A  TALK  TO  YOUNG  MEN 

IT  is  well  that  young  men  should  begin  at  the 
beginning  and  occupy  the  most  subordinate 
positions.  Many  of  the  leading  business  men  of 
Pittsburg  had  a  serious  responsibility  thrust  upon 
them  at  the  very  threshold  of  their  career.  They 
were  introduced  to  the  broom,  and  spent  the  first 
hours  of  their  business  lives  sweeping  out  the  office. 
I  notice  we  have  janitors  and  janitresses  now  in  offices, 
and  our  yoimg  men  unfortunately  miss  that  salutary 
branch  of  a  business  education.  But  if  by  chance 
the  professional  sweeper  is  absent  any  morning  the 
boy  who  has  the  genius  of  the  future  partner  in  him 
will  not  hesitate  to  try  his  hand  at  the  broom.  The 
other  day  a  fond  fashionable  mother  in  Michigan 
asked  a  yotmg  man  whether  he  had  ever  seen  a  young 
lady  sweep  in  a  room  so  grandly  as  her  Priscilla.  He 
said  no,  he  never  had,  and  the  mother  was  gratified 
beyond  measure,  but  then  said  he,  after  a  pause, 
"  What  I  should  like  to  see  her  do  is  sweep  out  a  room. " 
It  does  not  hurt  the  newest  comer  to  sweep  out  the 
office  if  necessary.  I  was  one  of  those  sweepers  my- 
self, and  who  do  you  suppose  were  my  fellow  sweepers  ? 

From  an  address  to  Students  of  the  Curry  Commercial  College, 
Pittsburg,  June  23,  1885 


4  THE   EMPIRE   OF   BUSINESS 

David  McCargo,  now  superintendent  of  the  Alleghany 
Valley  Railroad;  Robert  Pitcairn,  Superintendent  of 
the  Pennsylvania  Railroad,  and  Mr.  Moreland,  City 
Attorney,  We  all  took  turns,  two  each  morning  did 
the  sweeping ;  and  now  I  remember  Davie  was  so  proud 
of  his  clean  white  shirt  bosom  that  he  used  to  spread 
over  it  an  old  silk  bandana  handkerchief  which  he 
kept  for  the  purpose,  and  we  other  boys  thought  he 
was  putting  on  airs.  So  he  was.  None  of  us  had  a 
silk  handkerchief. 

Assuming  that  you  have  all  obtained  employment 
and  are  fairly  started,  my  advice  to  you  is  "  aim  high. " 
I  would  not  give  a  fig  for  the  young  man  who  does  not 
already  see  himself  the  partner  or  the  head  of  an  im- 
portant firm.  Do  not  rest  content  for  a  moment  in 
your  thoughts  as  head  clerk,  or  foreman,  or  general 
manager  in  any  concern,  no  matter  how  exten- 
sive. Say  each  to  yourself.  "My  place  is  at  the 
top."  Be  king  in  your  dreams.  Make  your  vow 
that  you  will  reach  that  position,  with  untar- 
nished reputation,  and  make  no  other  vow  to 
distract  your  attention,  except  the  very  commend- 
able one  that  when  you  are  a  member  of  the  firm  or 
before  that,  if  you  have  been  promoted  two  or  three 
times,  you  will  form  another  partnership  with  the 
loveliest  of  her  sex — a  partnership  to  which  our  new 
partnership  act  has  no  application.  The  liability 
there  is  never  limited. 


THE   ROAD   TO    BUSINESS   SUCCESS  5 

Let  me  indicate  two  or  three  conditions  essential 
to  success.  Do  not  be  afraid  that  I  am  going  to 
moralize,  or  inflict  a  homily  upon  you.  I  speak  upon 
the  subject  only  from  the  view  of  a  man  of  the  world, 
desirous  of  aiding  you  to  become  successful  business 
men.  You  all  know  that  there  is  no  genuine,  praise- 
worthy success  in  life  if  you  are  not  honest,  truthful, 
fair-dealing.  I  assume  you  are  and  will  remain  all 
these,  and  also  that  you  are  determined  to  live  pure, 
respectable  Hves,  free  from  pernicious  or  equivocal 
associations  with  one  sex  or  the  other.  There  is  no 
creditable  future  for  you  else.  Otherwise  your  learn- 
ing and  your  advantages  not  only  go  for  naught,  but 
serve  to  accentuate  your  failure  and  your  disgrace. 
I  hope  you  will  not  take  it  amiss  if  I  warn  you  against 
three  of  the  gravest  dangers  which  will  beset  you  in 
your  upward  path. 

The  first  and  most  seductive,  and  the  destroyer  of 
most  young  men,  is  the  drinking  of  liquor.  I  am  no 
temperance  lecturer  in  disguise,  but  a  man  who  knows 
and  tells  you  what  observation  has  proved  to  him; 
and  I  say  to  you  that  you  are  more  likely  to  fail  in 
your  career  from  acquiring  the  habit  of  drinking  liquor 
than  from  any,  or  all,  the  other  temptations  likely  to 
assail  you.  You  may  yield  to  almost  any  other  temp- 
tation and  reform — may  brace  up,  and  if  not  recover 
lost  ground,  at  least  remain  in  the  race  and  secure  and 
maintain  a  respectable  position.     But  from  the  insane 


6  THE   EMPIRE   OF    BUSINESS 

thirst  for  liquor  escape  is  almost  impossible.  I  have 
known  but  few  exceptions  to  this  rule.  First,  then, 
you  must  not  drink  liquor  to  excess.  Better  if  you 
do  not  touch  it  at  all — much  better ;  but  if  this  be  too 
hard  a  rule  for  you  then  take  your  stand  firmly  here : — 
Resolve  never  to  touch  it  except  at  meals.  A  glass 
at  dinner  will  not  hinder  your  advance  in  life  or  lower 
your  tone ;  but  I  implore  you  hold  it  inconsistent  with 
the  dignity  and  self-respect  of  gentlemen,  with  what 
is  due  from  yourselves  to  yourselves,  being  the  men 
you  are,  and  especially  the  men  you  are  determined 
to  become,  to  drink  a  glass  of  liquor  at  a  bar. 
Be  far  too  much  of  the  gentleman  ever  to  enter  a  bar- 
room. You  do  not  pursue  your  careers  in  safety  unless 
you  stand  firmly  upon  this  ground.  Adhere  to  it  and 
you  have  escaped  danger  from  the  deadliest  of  your 
foes. 

The  next  greatest  danger  to  a  young  business  man 
in  this  community  I  believe  to  be  that  of  speculation. 
When  I  was  a  telegraph  operator  here  we  had  no 
Exchanges  in  the  City,  but  the  men  or  firms  who 
speculated  upon  the  Eastern  Exchanges  were  neces- 
sarily known  to  the  operators.  They  could  be  counted 
on  the  fingers  of  one  hand.  These  men  were  not  our 
citizens  of  first  repute:  they  were  regarded  with  sus- 
picion. I  have  lived  to  see  all  of  these  speculators 
irreparably  ruined  men,  bankrupt  in  money  and  bank- 
rupt in  character.     There  is  scarcely  an  instance  of 


THE    ROAD   TO    BUSINESS   SUCCESS  7 

a  man  who  has  made  a  fortune  by  speculation  and 
kept  it.  Gamesters  die  poor,  and  there  is  certainly 
not  an  instance  of  a  speculator  who  has  lived  a  life 
creditable  to  himself,  or  advantageous  to  the  commu- 
nity. The  man  who  grasps  the  morning  paper  to  see 
first  how  his  speculative  ventures  upon  the  Exchanges 
are  likely  to  result,  unfits  himself  for  the  calm  consider- 
ation and  proper  solution  of  business  problems,  with 
which  he  has  to  deal  later  in  the  day,  and  saps  the 
sources  of  that  persistent  and  concentrated  energy 
upon  which  depend  the  permanent  success,  and  often 
the  very  safety,  of  his  main  business. 

The  speculator  and  the  business  man  tread  diverg- 
ing lines.  The  former  depends  upon  the  sudden  turn 
of  fortune's  wheel ;  he  is  a  millionnaire  to-day,  a  bank- 
rupt to-morrow.  But  the  man  of  business  knows 
that  only  by  years  of  patient,  unremitting  attention 
to  affairs  can  he  earn  his  reward,  which  is  the  result, 
not  of  chance,  but  of  well-devised  means  for  the  at- 
tainment of  ends.  During  all  these  years  his  is  the 
cheering  thought  that  by  no  possibility  can  he  benefit 
himself  without  carrying  prosperity  to  others.  The 
speculator  on  the  other  hand  had  better  never  have 
lived  so  far  as  the  good  of  others  or  the  good  of  the  com- 
munity is  concerned.  Hundreds  of  young  men  were 
tempted  in  this  city  not  long  since  to  gamble  in  oil, 
and  many  were  ruined;  all  were  injured  whether  they 
lost  or  won.     You  may  be,  nay,  you  are  certain  to  be 


8  THE   EMPIRE   OF    BUSINESS 

similarly  tempted;  but  when  so  tempted  I  hope  you 
will  remember  this  advice.  Say  to  the  tempter  who 
asks  you  to  risk  your  small  savings,  that  if  ever  you 
decide  to  speculate  you  are  determined  to  go  to  a 
regular  and  well-conducted  house  where  they  cheat 
fair.  You  can  get  fair  play  and  about  an  equal  chance 
upon  the  red  and  black  in  such  a  place ;  upon  the  Ex- 
change you  have  neither.  You  might  as  well  try 
your  luck  with  the  three-card-monte  man.  There  is 
another  point  involved  in  speculation.  Nothing  is 
more  essential  to  young  business  men  than  untar- 
nished credit,  credit  begotten  of  confidence  in  their 
prudence,  principles  and  stability  of  character.  Well, 
believe  me,  nothing  kills  credit  sooner  in  any  Bank 
Board  than  the  knowledge  that  either  firms  or  men 
engage  in  speculation.  It  matters  not  a  whit  whether 
gains  or  losses  be  the  temporary  result  of  these  oper- 
ations. The  moment  a  man  is  known  to  speculate, 
his  credit  is  impaired,  and  soon  thereafter  it  is  gone. 
How  can  a  man  be  credited  whose  resources  may  be 
swept  away  in  one  hour  by  a  panic  among  gamesters  ? 
Who  can  tell  how  he  stands  among  them  ?  except  that 
this  is  certain:  he  has  given  due  notice  that  he  may 
stand  to  lose  all,  so  that  those  who  credit  him  have 
themselves  to  blame.  Resolve  to  be  business  men,  but 
speculators  never. 

The  third  and  last  danger  against  which  I  shall  warn 
you  is  one  which  has  wrecked  many  a  fair  craft  which 


THE   ROAD   TO    BUSINESS   SUCCESS        9 

started  well  and  gave  promise  of  a  prosperous  vovage. 
It  is  the  perilous  habit  of  indorsing — all  the  more 
dangerous,  inasmuch  as  it  assails  one  generally  in  the 
garb  of  friendship.  It  appeals  to  your  generous  in- 
stincts, and  you  say,  "  How  can  I  refuse  to  lend  my 
name  only,  to  assist  a  friend?"  It  is  because  there 
is  so  much  that  is  true  and  commendable  in  that  view 
that  the  practice  is  so  dangerous.  Let  me  endeavor 
to  put  you  upon  safe  honourable  grounds  in  regard  to 
it.  I  would  say  to  you  to  make  it  a  rule  now,  never 
indorse:  but  this  is  too  much  like  never  taste  wine,  or 
never  smoke,  or  any  other  of  the  "nevers. "  They 
generally  result  in  exceptions.  You  will  as  business 
men  now  and  then  probably  become  security  for 
friends.  Now,  here  is  the  line  at  which  regard  for 
the  success  of  friends  should  cease  and  regard  for  yoiir 
own  honour  begins. 

If  you  owe  anything,  all  your  capital  and  all  your 
effects  are  a  solemn  trust  in  your  hands  to  be  held  in- 
violate for  the  security  of  those  who  have  trusted  you. 
Nothing  can  be  done  by  you  with  honour  which  jeop- 
ardizes these  first  claims  upon  you.  When  a  man  in 
debt  indorses  for  another,  it  is  not  his  own  credit  or 
his  own  capital  he  risks,  it  is  that  of  his  own  creditors. 
He  violates  a  trust.  Mark  you  then,  never  indorse 
until  you  have  cash  means  not  required  for  your  own 
debts,  and  never  indorse  beyond  those  means. 

Before    you    indorse  at  all,   consider  indorsements 


lo  THE   EMPIRE   OF   BUSINESS 

as  gifts,  and  ask  yourselves  whether  you  wish  to  make 
the  gift  to  your  friend  and  whether  the  money  is 
really  yours  to  give  and  not  a  trust  for  your  creditors. 
\^  You  are  not  safe,  gentlemen,  unless  you  stand  firmly 

^    ^  ^  /  upon  this  as  the  only  groimd  which  an  honest  business 


x^S 


man  can  occupy.  rs>ryo^^^^. 

I  beseech  you  avoid  liquo^,''^5ieculation  and  in- 
dorsement. Do  not  fail  in  either,  for  liquor  and 
speculation  are  the  Scylla  and  Charybdis  of  the  young 
man's  business  sea,  and   indorsement  his  rock  ahead. 

Assuming  you  are  safe  in  regard  to  these  your  gravest 
dangers,  the  question  now  is  how  to  rise  from  the 
subordinate  position  we  have  imagined  you  in,  through 
the  successive  grades  to  the  position  for  which  you 
are,  in  my  opinion,  and,  I  trust,  in  your  own,  evi- 
dently intended.  I  can  give  you  the  secret.  It  lies 
mainly  in  this.  Instead  of  the  question,  "What  must 
I  do  for  my  employer?"  substitute  "What  can  I  do?" 
Faithful  and  conscientious  discharge  of  the  duties  as- 
signed you  is  all  very  well,  but  the  verdict  in  such 
cases  generally  is  that  you  perform  your  present 
duties  so  well  that  you  had  better  continue  perform- 
ing them.  Now,  young  gentlemen,  this  will  not  do. 
It  will  not  do  for  the  coming  partners.  There  must 
be  something  beyond  this.  We  make  Clerks,  Book- 
keepers, Treasurers,  Bank  Tellers  of  this  class,  and 
there  they  remain  to  the  end  of  the  chapter.  The 
rising  man  must  do  something  exceptional,  and  be- 


THE   ROAD   TO    BUSINESS   SUCCESS         ii 

yond  the  range  of  his  special  department.  He  must 
ATTRACT  ATTENTION.  A  shipping  clerk,  he  may  do 
so  by  discovering  in  an  invoice  an  error  with  which  he 
has  nothing  to  do,  and  which  has  escaped  the  atten- 
tion of  the  proper  party.  If  a  weighing  clerk,  he  may 
save  for  the  firm  by  doubting  the  adjustment  of  the 
scales  and  having  them  corrected,  even  if  this  be  the 
province  of  the  master  mechanic.  If  a  messenger 
boy,  even  he  can  lay  the  seed  of  promotion  by  going 
beyond  the  letter  of  his  instructions  in  order  to  secure 
the  desired  reply.  There  is  no  service  so  low  and 
simple,  neither  any  so  high,  in  which  the  young  man 
of  ability  and  willing  disposition  cannot  readily  and 
almost  daily  prove  himself  capable  of  greater  trust 
and  usefulness,  and,  what  is  equally  important,  show 
his  invincible  determination  to  rise.  Some  day,  in 
your  own  department,  you  will  be  directed  to  do  or 
say  something  which  you  know  will  prove  disadvan- 
tageous to  the  interest  of  the  firm.  Here  is  your 
chance.  Stand  up  like  a  man  and  say  so.  Say  it 
boldly,  and  give  your  reasons,  and  thus  prove  to  your 
employer  that,  while  his  thoughts  have  been  engaged 
upon  other  matters,  you  have  been  studying  during 
hours  when  perhaps  he  thought  you  asleep,  how  to 
advance  his  interests.  You  may  be  right  or  you  may 
be  wrong,  but  in  either  case  you  have  gained  the  first 
condition  of  success.  You  have  attracted  attention. 
Your  employer  has  found   that   he  has   not  a  mere 


12  THE   EMPIRE   OF   BUSINESS 

hireling  in  his  service,  but  a  man ;  not  one  who  is  con- 
tent to  give  so  many  hours  of  work  for  so  many  dollars 
in  return,  but  one  who  devotes  his  spare  hours  and 
constant  thoughts  to  the  business.  Such  an  employe 
must  perforce  be  thought  of,  and  thought  of  kindly 
and  well.  It  will  not  be  long  before  his  advice  is 
asked  in  his  special  branch,  and  if  the  advice  given  be 
sound,  it  will  soon  be  asked  and  taken  upon  questions 
of  broader  bearing.  This  means  partnership;  if  not 
with  present  employers  then  with  others.  Your  foot, 
in  such  a  case,  is  upon  the  ladder;  the  amount  of 
climbing  done  depends  entirely  upon  yourself. 

One  false  axiom  you  will  often  hear,  which  I  wish  to 
guard  you  against:  "Obey  orders  if  you  break 
owners."  Don't  you  do  it.  This  is  no  rule  for  you 
to  follow.  Always  break  orders  to  save  owners. 
There  never  was  a  great  character  who  did  not  some- 
times smash  the  routine  regulations  and  make  new 
ones  for  himself.  The  rule  is  only  suitable  for  such 
as  have  no  aspirations,  and  you  have  not  forgotten 
that  you  are  destined  to  be  owners  and  to  make  orders 
and  break  orders.  Do  not  hesitate  to  do  it  whenever 
you  are  sure  the  interests  of  your  employer  will  be 
thereby  promoted  and  when  you  are  so  sure  of  the 
result  that  you  are  willing  to  take  the  responsibility. 
You  will  never  be  a  partner  unless  you  know  the 
business  of  your  department  far  better  than  the  owners 
possibly  can.     When  called  to  account  for  your  in- 


THE   ROAD   TO    BUSINESS   SUCCESS         13 

dependent  action,  show  him  the  result  of  your  genius, 
and  tell  him  that  you  knew  that  it  would  be  so ;  show 
him  how  mistaken  the  orders  were.  Boss  your  boss 
just  as  soon  as  you  can;  try  it  on  early.  There  is 
nothing  he  will  like  so  well  if  he  is  the  right  kind  of 
boss ;  if  he  is  not,  he  is  not  the  man  for  you  to  remain 
with — leave  him  whenever  you  can,  even  at  a  present 
sacrifice,  and  find  one  capable  of  discerning  genius. 
Our  young  partners  in  the  Carnegie  firm  have  won  their 
spurs  by  showing  that  we  did  not  know  half  as  well 
what  was  wanted  as  they  did.  Some  of  them  have 
acted  upon  occasion  with  me  as  if  they  owned  the  firm 
and  I  was  but  some  airy  New  Yorker  presuming  to 
advise  upon  what  I  knew  very  little  about.  Well, 
they  are  not  interfered  with  much  now.  They  were 
the  true  bosses — the  very  men  we  were  looking  for. 

There  is  one  sure  mark  of  the  coming  partner,  the 
future  millionnaire ;  his  revenues  always  exceed  his  ex- 
penditures. He  begins  to  save  early,  almost  as  soon 
as  he  begins  to  earn.  No  matter  how  little  it  may  be 
possible  to  save,  save  that  little.  Invest  it  securely, 
not  necessarily  in  bonds,  but  in  anything  which  you 
have  good  reason  to  believe  will  be  profitable,  but  no 
gambling  with  it,  remember.  A  rare  chance  will  soon 
present  itself  for  investment.  The  little  you  have 
saved  will  prove  the  basis  for  an  amount  of  credit 
utterly  surprising  to  you.  Capitalists  trust  the  saving 
young  man.     For  every  hundred  dollars  you  can  pro- 


14  THE   EMPIRE    OF    BUSINESS 

duce  as  the  result  of  hard-won  savings,  Midas,  in 
search  of  a  partner,  will  lend  or  credit  a  thousand; 
for  every  thousand,  fifty  thousand.  It  is  not  capital 
that  your  seniors  require,  it  is  the  man  who  has  proved 
that  he  has  the  business  habits  which  create  capital, 
and  to  create  it  in  the  best  of  all  possible  ways,  as  far 
as  self-discipline  is  concerned,  is,  by  adjusting  his 
habits  to  his  means.  Gentlemen,  it  is  the  first  hun- 
dred dollars  saved  which  tells.  Begin  at  once  to  lay 
up  something.  The  bee  predominates  in  the  future 
millionnaire. 

Of  course  there  are  better,  higher  aims  than  saving. 
As  an  end,  the  acquisition  of  wealth  is  ignoble  in  the 
extreme;  I  assume  that  you  save  and  long  for  wealth 
only  as  a  means  of  enabling  you  the  better  to  do  some 
good  in  your  day  and  generation.  Make  a  note  of 
this  essential  rule :     Expenditure  always  within  income. 

You  may  grow  impatient,  or  become  discouraged 
when  year  by  year  you  float  on  in  subordinate  posi- 
tions. There  is  no  doubt  that  it  is  becoming  harder 
and  harder  as  business  gravitates  more  and  more  to 
immense  concerns,  for  a  young  man  without  capital 
to  get  a  start  for  himself,  and  in  this  city  especially, 
where  large  capital  is  essential,  it  is  unusually  difficult. 
Still,  let  me  tell  you  for  your  encouragement,  that 
there  is  no  country  in  the  world,  where  able  and  en- 
ergetic young  men  can  so  readily  rise  as  this,  nor  any 
city   where   there   is   more   room   at  the  top.     It  has 


THE    ROAD   TO    BUSINESS   SUCCESS         15 

been  impossible  to  meet  the  demand  for  capable,  first- 
class  bookkeepers  (mark  the  adjectives)  the  supply  has 
never  been  equal  to  the  demand.  Yotmg  men  give  all 
kinds  of  reasons  why  in  their  cases  failure  was  clearly  at- 
tributable to  exceptional  circumstances  which  render 
success  impossible.  Some  never  had  a  chance,  ac- 
cording to  their  own  story.  This  is  simply  nonsense. 
No  young  man  ever  lived  who  had  not  a  chance,  and 
a  splendid  chance,  too,  if  he  ever  was  employed  at  all. 
He  is  assayed  in  the  mind  of  his  immediate  superior, 
from  the  day  he  begins  work,  and,  after  a  time,  if  he 
has  merit,  he  is  assayed  in  the  council  chamber  of 
the  firm.  His  ability,  honesty,  habits,  associations, 
temper,  disposition,  all  these  are  weighed  and  analysed. 
The  young  man  who  never  had  a  chance  is  the  same 
young  man  who  has  been  canvassed  over  and  over 
again  by  his  superiors,  and  found  destitute  of  neces- 
sary qualifications,  or  is  deemed  unworthy  of  closer 
relations  with  the  firm,  owing  to  some  objectionable 
act,  habit,  or  association,  of  which  he  thought  his 
employers  ignorant. 

Another  class  of  young  men  attribute  their  failure 
to  employers  having  relations  or  favourites  whom  they 
advanced  unfairly.  They  also  insist  that  their  em- 
ployers disliked  brighter  intelligences  than  their  own, 
and  were  disposed  to  discourage  aspiring  genius,  and 
delighted  in  keeping  young  men  down.  There  is 
nothing  in    this.     On   the   contrary,   there   is  no  one 


i6  THE   EMPIRE   OF    BUSINESS 

suffering  so  much  for  lack  of  the  right  man  in  the 
right  place,  nor  so  anxious  to  find  him  as  the  owner. 
There  is  not  a  firm  in  Pittsburg  to-day  which  is  not 
in  the  constant  search  for  business  ability,  and  every 
one  of  them  will  tell  you  that  there  is  no  article  in 
the  market  at  all  times  so  scarce.  There  is  always 
a  boom  in  brains,  cultivate  that  crop,  for  if  you  grow 
any  amount  of  that  commodity,  here  is  your  best 
market  and  you  cannot  overstock  it,  and  the  more 
brains  you  have  to  sell,  the  higher  price  you  can  exact. 
They  are  not  quite  so  sure  a  crop  as  wild  oats,  which 
never  fail  to  produce  a  bountiful  harvest,  but  they 
have  the  advantage  over  these  in  always  finding  a 
market.  Do  not  hesitate  to  engage  in  any  legitimate 
business,  for  there  is  no  business  in  America,  I  do  not 
care  what,  which  will  not  yield  a  fair  profit  if  it  re- 
ceive the  unremitting,  exclusive  attention,  and  all  the 
capital  of  capable  and  industrious  men.  Every  busi- 
ness will  have  its  season  of  depression — years  always 
come  during  which  the  manufacturers  and  mer- 
chants of  the  city  are  severely  tried — years  when 
mills  must  be  run,  not  for  profit,  but  at  a  loss,  that 
the  organization  and  men  may  be  kept  together  and 
employed,  and  the  concern  may  keep  its  products  in 
the  market.  But  on  the  other  hand,  every  legitimate 
business  producing  or  dealing  in  an  article  which  man 
requires  is  bound  in  time  to  be  fairly  profitable,  if 
properly  conducted. 


THE   ROAD   TO    BUSINESS   SUCCESS         17 

And  here  is  the  prime  condition  of  success,  the 
great  secret:  concentrate  your  energy,  thought,  and 
capital  exclusively  upon  the  business  in  which  you 
are  engaged.  Having  begun  in  one  line,  resolve  to 
fight  it  out  on  that  line,  to  lead  in  it ;  adopt  every  im- 
provement, have  the  best  machinery,  and  know  the 
most  about  it. 

The  concerns  which  fail  are  those  which  have  scat- 
tered their  capital,  which  means  that  they  have  scat- 
tered their  brains  also.  They  have  investments  in  this, 
or  that,  or  the  other,  here,  there  and  everywhere. 
"Don't  put  all  your  eggs  in  one  basket"  is  all  wrong. 
I  tell  you  "put  all  your  eggs  in  one  basket,  and  then 
watch  that  basket. "  Look  round  you  and  take  notice ; 
men  who  do  that  do  not  often  fail.  It  is  easy  to  watch 
and  carry  the  one  basket.  It  is  trying  to  carry  too 
many  baskets  that  breaks  most  eggs  in  this  country. 
He  who  carries  three  baskets  must  put  one  on  his  head, 
which  is  apt  to  tumble  and  trip  him  up.  One  fault  of 
the  American  business  man  is  lack  of  concentration. 

To  summarize  what  I  have  said :  '  Aim  for  the  high- 
est >  never  enter  a  bar-room;  do  not  touch  liquor,  or 
if  at  all  only  at  meals) never  speculate^  never  indorse 
beyond  your  surplus  cash  fund;  make  the  firm's  in- 
terest yours ;^break  orders  always  to  save  owners; 
^  concentrate ;[,  put  all  your  eggs  in  one  basket,  and 
watch  that  basketg  expenditure  always  within  revenue ; 
lastly,/ be  not  impatient,  for,  as  Emerson  says,  "  no  one 

C 


'J 


i8  THE   EMPIRE   OF   BUSINESS 

can  cheat  you  out  of  ultimate  success  but  yourselves." 
I  congratulate  poor  young  men  upon  being  born 
to  that  ancient  and  honourable  degree  which  renders 
it  necessary  that  they  should  devote  themselves  to 
hard  work.  A  basketful  of  bonds  is  the  heaviest 
basket  a  young  man  ever  had  to  carry.  He  generally 
gets  to  staggering  under  it.  We  have  in.  this  city 
creditable  instances  of  such  young  men,  who  have 
pressed  to  the  front  rank  of  our  best  and  most  useful 
citizens.  These  deserve  great  credit.  But  the  vast 
majority  of  the  sons  of  rich  men  are  unable  to  resist 
the  temptations  to  which  wealth  subjects  them,  and 
sink  to  unworthy  lives.  I  would  almost  as  soon  leave 
a  young  man  a  curse,  as  burden  him  with  the  almighty 
dollar.  It  is  not  from  this  class  you  have  rivalry 
to  fear.  The  partner's  sons  will  not  trouble  you  much, 
but  look  out  that  some  boys  poorer,  much  poorer  than 
yourselves,  whose  parents  cannot  afford  to  give  them 
the  advantages  of  a  course  in  this  institute,  advantages 
which  should  give  you  a  decided  lead  in  the  race- 
look  out  that  such  boys  do  not  challenge  you  at  the 
post  and  pass  you  at  the  grand  stand.  Look  out  for 
the  boy  who  has  to  plunge  into  work  direct  from  the 
common  school  and  who  begins  by  sweeping  out  the 
office.  He  is  the  probable  dark  horse  that  you  had 
better  watch. 


The  A  B  C  of  Money 

Barter — the  direct  exchange  of  commodities.  The 
needs  and  uses  of  money.  Comparison  of  the  two 
standards — gold  and  silver.  How  the  money  stand- 
dard  affects  the  credit  of  a  nation. 


THE    A  B  C    OF    MONEY 

I  SUPPOSE  every  one  who  has  spoken  to  or  written 
for  the  pubHc  has  wished  at  times  that  everybody 
would  drop  everything  and  just  Hsten  to  him  for  a  few 
minutes.  I  feel  so  this  morning,  for  I  believe  that  a 
grave  injury  threatens  the  people  and  the  progress  of 
our  country  simply  because  the  masses — the  farmers 
and  the  wage-earners — do  not  understand  the  ques- 
tion of  money.  I  wish  therefore  to  explain  "money" 
in  so  simple  a  way  that  all  can  understand  it. 

Perhaps  some  one  in  the  vast  audience  which  I  have 
imagined  I  am  about  to  hold  spellbound  cries  out: 
"Who  are  you — a  gold-bug,  a  miUionnaire,  an  iron- 
baron,  a  beneficiary  of  the  McKinley  Bill?"  Before 
beginning  my  address,  let  me  therefore  reply  to  that 
imaginary  gentleman  that  I  have  not  seen  a  thousand 
dollars  in  gold  for  many  a  year.  So  far  as  the  McKin- 
ley Bill  is  concerned,  I  am  perhaps  the  one  man  in  the 
United  States  who  has  the  best  right  to  complain 
under  it,  for  it  has  cut  and  slashed  the  duties  upon 
iron  and  steel,  reducing  them  20,  25,  and  30  per  cent. ; 
and  if  it  will  recommend  me  to  my  supposed  inter- 

From  The  North  American  Review,  June,    1891. 

21 


22  THE   EMPIRE   OF   BUSINESS 

rupter,  I  beg  to  inform  him  that  I  do  not  greatly  dis- 
approve of  these  reductions,  that  as  an  American  manu- 
facturer I  intend  to  struggle  still  against  the  foreigner 
for  the  home  market,  even  with  the  lower  duties  fixed 
upon  our  product  by  that  bill,  and  that  I  am  not  in 
favour  of  protection  beyond  the  point  necessary  to  allow 
Americans  to  retain  their  own  market  in  a  fair  contest 
with  the  foreigner. 

It  does  not  matter  who  the  man  is,  nor  what 
he  does, — be  he  worker  in  the  mine,  factory,  or 
field,  farmer,  labourer,  merchant,  manufacturer,  or 
millionnaire, — he  is  deeply  interested  in  understanding 
this  question  of  money,  and  in  having  the  right  policy 
adopted  in  regard  to  it.  Therefore  I  ask  all  to  hear 
what  I  have  to  say,  because  what  is  good  for  one 
worker  must  be  good  for  all,  and  what  injures  one 
must  injure  all,  poor  or  rich. 

To  get  at  the  root  of  the  subject,  you  must  know, 
first,  why  money  exists;  secondly,  what  money  really 
is.  Let  me  try  to  tell  you,  taking  a  new  district  of  our 
own  modem  country  to  illustrate  how  " money"  comes. 
In  times  past,  when  the  people  only  tilled  the  soil,  and 
commerce  and  manufactures  had  not  developed,  men 
had  few  wants,  and  so  they  got  along  without  "  money  " 
by  exchanging  the  articles  themselves  when  they 
needed  something  which  they  had  not.  The  farmer 
who  wanted  a  pair  of  shoes  gave  so  many  bushels  of 
com  for  them,  and  his  wife  bought  her  sun-bonnet  by 


THE    A    B    C    OF    MONEY  23 

giving  so  many  bushels  of  potatoes ;  thus  all  sales  and 
purchases  were  made  by  exchanging  articles — by 
barter. 

As  population  grew  and  wants  extended,  this  plan 
became  very  inconvenient.  One  man  in  the  district 
then  started  a  general  store  and  kept  on  hand  a  great 
many  of  the  things  which  were  most  wanted,  and  took 
for  these  any  of  the  articles  which  the  farmer  had  to 
give  in  exchange.  This  was  a  great  step  in  advance, 
for  the  farmer  who  wanted  half  a  dozen  different  things 
when  he  went  to  the  village  had  then  no  longer  to 
search  for  half  a  dozen  different  people  who  wanted 
one  or  more  of  the  things  he  had  to  offer  in  exchange. 
He  could  now  go  directly  to  one  man,  the  storekeeper, 
and  for  any  of  his  agricultural  products  he  could  get 
most  of  the  articles  he  desired.  It  did  not  matter  to 
the  storekeeper  whether  he  gave  the  farmer  tea  or 
coffee,  blankets  or  a  hayrake;  nor  did  it  matter  what 
articles  he  took  from  the  farmer,  wheat  or  com  or 
potatoes,  so  he  could  send  them  away  to  the  city  and 
get  other  articles  for  them  which  he  wanted.  The 
farmer  could  even  pay  the  wages  of  his  hired  men  by 
giving  them  orders  for  articles  upon  the  store.  No 
dollars  appear  here  yet,  you  see;  all  is  still  barter — 
exchange  of  articles;  very  inconvenient  and  very 
costly,  because  the  agricultural  articles  given  in  ex- 
change had  to  be  hauled  about  and  were  always  chang- 
ing their  value. 


24  THE   EMPIRE   OF    BUSINESS 

One  day  the  storekeeper  would  be  willing  to  take, 
say,  a  bushel  of  wheat  for  so  many  pounds  of  sugar; 
but  upon  the  next  visit  of  the  farmer  it  might  be  im- 
possible for  him  to  do  so.  He  might  require  more 
wheat  for  the  same  amount  of  sugar.  But  if  the 
market  for  wheat  had  risen  and  not  fallen,  you  may  be 
sure  the  storekeeper  didn't  take  less  wheat  as  promptly 
as  he  required  more.  Just  the  same  with  any  of  the 
articles  which  the  farmer  had  to  offer.  These  went 
up  and  down  in  value;  so  did  the  tea  and  the  coffee, 
and  the  sugar  and  the  clothing,  and  the  boots  and  the 
shoes  which  the  storekeeper  had  for  exchange. 

Now,  it  is  needless  to  remark  that  in  all  these  deal- 
ings the  storekeeper  had  the  advantage  of  the  farmer* 
He  knew  the  markets  and  their  ups  and  downs  long 
before  the  farmer  did,  and  he  knew  the  signs  of  the 
times  better  than  the  farmer  or  any  of  his  customers 
could.  The  cute  storekeeper  had  the  inside  track  all 
the  time.  Just  here  I  wish  you  to  note  particularly 
that  the  storekeeper  liked  to  take  one  article  from  the 
farmer  better  than  another;  that  article  being  always 
the  one  for  which  the  storekeeper  had  the  best  cus- 
tomers— something  that  was  most  in  demand.  In 
Virginia  that  article  came  to  be  tobacco ;  over  a  great 
portion  of  our  country  it  was  wheat, — whence  comes 
the  saying,  "  As  good  as  wheat. "  It  was  taken  every- 
where, because  it  could  be  most  easily  disposed  of  for 
anything  else  desired.     A  curious  illustration  about 


THE    A    B    C    OF    MONEY  25 

wheat  I  find  in  the  Hfe  of  my  friend,  Judge  Mellon,  of 
Pittsburg,  who  has  written  one  of  the  best  biographies 
in  the  worid  because  it  is  done  so  naturally.  When 
the  Judge's  father  bought  his  farm  near  Pittsburg,  he 
agreed  to  pay,  not  in  "  dollars, "  but  in  "  sacks  of  wheat" 
— so  many  sacks  every  year.  This  was  not  so  very 
long  ago. 

What  we  now  call  " money"  was  not  much  used  then 
in  the  West  or  South,  but  you  see  that  in  its  absence 
experience  had  driven  the  people  to  select  some  one 
article  to  use  for  exchanging  other  articles,  and  that 
this  was  wheat  in  Pennsylvania  and  tobacco  in  Vir- 
ginia. This  was  done,  not  through  any  legislation, 
but  simply  because  experience  had  proved  the  neces- 
sity for  making  the  one  thing  serve  as  "  money"  which 
had  proved  itself  best  as  a  basis  in  paying  for  a  farm 
or  for  effecting  any  exchange  of  things;  and,  further, 
different  articles  were  foimd  best  for  the  purpose  in 
different  regions.  Wheat  was  "as  good  as  wheat" 
for  using  as  "money,"  independent  of  any  law.  The 
people  had  voted  for  wheat  and  made  it  their  "  money  "  ; 
and  because  tobacco  was  the  principal  crop  in  Vir- 
ginia, the  people  there  found  it  the  best  for  using  as 
"money"  in  that  State, 

Please  observe  that  in  all  cases  human  society 
chooses  for  that  basis-article  we  call  "money"  that 
which  fluctuates  least  in  price,  is  the  most  generally 
used  or  desired,  is  in  the  greatest,  most  general,  and 


26  THE    EMPIRE   OF    BUSINESS 

most  constant  demand,  and  has  value  in  itself.  "Money" 
is  only  a  word  meaning  the  article  used  as  the  basis- 
article  for  exchanging  all  other  articles.  An  article 
is  not  first  made  valuable  by  law  and  then  elected  to 
be  "money."  The  article  first  proves  itself  valuable 
and  best  suited  for  the  purpose,  and  so  becomes  of 
itself  and  in  itself  the  basis-article — money.  It  elects 
itself.  Wheat  and  tobacco  were  just  as  clearly  "money" 
when  used  as  the  basis-article  as  gold  and  silver  are 
"money"  now. 

We  take  one  step  further.  The  country  becomes 
more  and  more  populous,  the  wants  of  the  people  more 
and  more  numerous.  The  use  of  bulky  products  like 
wheat  and  tobacco,  changeable  in  value,  liable  to  decay, 
and  of  different  grades,  is  soon  found  troublesome  and 
unsuited  for  the  growing  business  of  exchange  of  arti- 
cles, and  they  are  therefore  unfit  to  be  longer  used  as 
"money."  You  see  at  once  that  we  could  not  get 
along  to-day  with  grain  as  "money."  Then  metals 
proved  their  superiority.  These  do  not  decay,  do  not 
change  in  value  so  rapidly,  and  they  share  with  wheat 
and  tobacco  the  one  essential  quality  of  also  having 
value  in  themselves  for  other  purposes  than  for  the 
mere  basis  of  exchange.  People  want  them  for  per- 
sonal adornment  or  in  manufactures  and  the  arts — 
for  a  thousand  uses ;  and  it  is  this  very  fact  that  makes 
them  suitable  for  use  as  "money. "  Just  try  to  count 
how  many  purposes  gold  is  needed  for,  because  it  is 


THE    A    B    C    OF    MONEY  27 

best  suited  for  those  purposes.  It  meets  us  every- 
where. We  cannot  even  get  married  without  the 
ring  of  gold. 

Now,  because  metals  have  a  value  in  the  open  mar- 
ket, being  desired  for  other  uses  than  for  the  one  use  as 
"money,"  and  because  the  supply  of  these  is  limited 
and  cannot  be  increased  as  easily  as  that  of  wheat  or 
tobacco,  these  metals  are  less  liable  to  fluctuate  in 
value  than  any  article  previously  used  as  "money." 
This  is  of  vital  importance,  for  the  one  essential  quality 
that  is  needed  in  the  article  which  we  use  as  a  basis  for 
exchanging  all  other  articles  is  fixity  of  value.  The 
race  has  instinctively  always  sought  for  the  one  article 
in  the  world  which  most  resembles  the  North  Star 
among  the  other  stars  in  the  heavens,  and  used  it  as 
"money" — the  article  that  changes  least  in  value,  as 
the  North  Star  is  the  star  which  changes  its  position 
least  in  the  heavens ;  and  what  the  North  Star  is  among 
stars  the  article  people  elect  as  "money"  is  among 
articles.  All  other  articles  revolve  around  it,  as  all 
other  stars  revolve  around  the  North  Star. 

We  have  proceeded  so  far  that  we  have  now  dropped 
all  perishable  articles  and  elected  metals  as  our 
' '  money ' '  or,  rather,  metals  have  proved  them- 
selves better  than  anything  else  for  the  stand- 
ard of  value,  "money."  But  another  great  step 
had  to  h)c  taken.  When  I  was  in  China,  I  re- 
ceived   as   change    shavings     and     chips    cut    ofT    a 


28  THE   EMPIRE   OF    BUSINESS 

bar  of  silver  and  weighed  before  my  eyes  in  the  scales 
of  the  merchant,  for  the  Chinese  have  no  "coined" 
money.  In  Siam  "cowries"  are  used — pretty  little 
shells  which  the  natives  use  as  ornaments.  Twelve 
of  these  represent  a  cent  in  value.  But  you  can  well 
see  how  impossible  it  was  for  me  to  prevent  the  Chinese 
dealer  from  giving  me  less  than  the  amount  of  silver 
to  which  I  was  entitled,  or  the  Siam  dealer  from  giving 
me  poor  shells,  of  the  value  of  which  I  knew  nothing. 
Civilized  nations  soon  felt  the  necessity  of  having  their 
governments  take  certain  quantities  of  the  metals  and 
stamp  upon  them  the  evidence  of  their  weight,  purity, 
and  real  value.  Thus  came  the  "coinage"  of  metals 
into  "money" — a  great  advance.  People  then  knew 
at  sight  the  exact  value  of  each  piece,  and  could  no 
longer  be  cheated,  no  weighing  or  testing  being  neces- 
sary. Note  that  the  government  stamp  did  not  add 
any  value  to  the  coin.  The  government  did  not  at- 
tempt to  "make  money"  out  of  nothing;  it  only  told 
the  people  the  market  value  of  the  metal  in  each  coin, 
just  what  the  metal — the  raw  material — could  be  sold 
for  as  metal  and  not  as  "money." 

But  even  after  this  much  swindling  occurred.  Rogues 
cut  the  edges  and  then  beat  the  coins  out,  so  that  many 
of  these  became  very  light.  A  clever  Frenchman  in- 
vented the  "  milling"  of  the  edges  of  the  coins,  whereby 
this  robbery  was  stopped,  and  civilized  nations  had  at 
last  the  coinage  which  still  remains  with  us,the  most  per- 


THE    A    B    C    OF    MONEY  29 

feet  ever  known,  because  it  is  of  high  value  in  itself  and 
changes  least.  x\n  ideally-perfect  article  for  use  as 
"money"  is  one  that  never  changes.  This  is  essential 
for  the  protection  of  the  workers — the  farmers,  me- 
chanics, and  all  who  labour ;  for  nothing  tends  to  make 
every  exchange  of  articles  a  speculation  so  much  as 
"money"  which  changes  in  value,  and  in  the  game  of 
speculation  the  masses  of  the  people  are  always  sure 
to  be  beaten  by  the  few  who  deal  in  money  and  know 
most  about  it. 

Nothing  places  the  farmer,  the  wage-earner,  and 
all  those  not  closely  connected  with  financial  affairs 
at  so  great  a  disadvantage  in  disposing  of  their  labour 
or  products  as  changeable  "money."  All  such  are 
exactly  in  the  position  occupied  by  the  farmer  trading 
with  the  storekeeper  as  before  described.  You  all 
know  that  fish  will  not  rise  to  the  fly  in  calm  weather. 
It  is  when  the  wind  blows  and  the  surface  is  ruffled 
that  the  poor  victim  mistakes  the  lure  for  a  genuine 
fly.  So  it  is  with  the  business  affairs  of  the  world. 
In  stormy  times,  when  prices  are  going  up  and  down, 
when  the  value  of  the  article  used  as  money  is  dancing 
about — up  to-day  and  down  to-morrow — and  the 
waters  are  troubled,  the  clever  speculator  catches  the 
fish  and  fills  his  basket  with  the  victims.  Hence  the 
farmei  and  the  mechanic,  and  all  people  having 
crops  to  sell  or  receiving  salaries  or  wages,  are 
those   most  deeply  interested  in  securing  and  main- 


30  THE    EMPIRE   OF    BUSINESS 

taining  fixity  of  value  in  the  article  they  have  to 
take  as  "money." 

When  the  use  of  metals  as  money  came,  it  was  found 
that  more  than  two  metals  were  necessary  to  meet  all 
requirements.  It  would  not  be  wise  to  make  a  gold 
coin  for  any  smaller  sum  than  a  dollar,  for  the  coin 
would  be  too  small ;  and  we  could  not  use  a  silver  coin 
for  more  than  one  dollar,  because  the  coin  would  be 
too  large.  So  we  had  to  use  a  less  valuable  metal 
for  small  sums,  and  we  took  silver ;  but  it  was  soon  found 
that  we  could  not  use  silver  for  less  than  ten-cent  coins, 
a  dime  being  as  small  a  coin  as  can  be  used  in  silver; 
and  we  were  compelled  to  choose  something  else  for 
smaller  coins.  We  had  to  take  a  metal  less  valuable 
than  silver,  and  we  took  a  mixture  of  nickel  and  cop- 
per to  make  five-cent  pieces;  but  even  then  we  found 
that  nickel  was  too  valuable  to  make  one-  and  two- 
cent  pieces,  and  so  we  had  to  take  copper  alone  for 
these — the  effort  in  regard  to  every  coin  being  to  put 
metal  in  it  as  nearly  as  possible  to  the  full  amount  of 
what  the  government  stamp  said  the  coin  was  worth. 

Thus  for  one  cent  in  copper  we  tried  to  put  in  a  cent's 
worth  of  copper;  in  the  "nickel"  we  tried  to  put  in 
something  like  five  cents'  worth  of  nickel  and  copper; 
but  because  copper  and  nickel  change  in  value  from 
day  to  day,  even  more  than  silver,  it  is  impossible  to 
get  in  each  coin  the  exact  amount  of  value.  If  we  put 
in  what  was  one  day  the  exact  value,  and  copper  and 


THE    A    B    C    OF    MONEY  31 

nickel  rose  in  the  market  as  metals,  coins  would  be 
melted  down  by  the  dealers  in  these  metals  and  a 
profit  made  by  them,  and  we  should  have  no  coin  left. 
Therefore  we  have  to  leave  a  margin  and  always  put 
a  little  less  metal  in  these  coins  than  would  sell  for  the 
full  amoimt  they  represent.  Hence  all  this  small 
coinage  is  called  in  the  history  of  money  "token 
money."  It  is  a  "token"  that  it  will  bring  so  much 
in  gold.  Anybody  who  holds  twenty  "nickels"  must 
be  able  to  get  as  good  as  one  gold  dollar  for  them  in 
order  that  these  may  safely  serve  their  purpose  as 
money.  Nations  generally  fix  a  limit  to  the  use  of 
"token  money,"  and  make  it  legal  tender  to  a  small 
amoimt.  For  instance,  in  Britain  no  one  can  make 
another  take  "  token  money  "  for  more  than  ten  dollars, 
and  all  silver  coins  there  are  classed  as  "token  money." 

I  cannot  take  you  any  more  steps  forward  in  the 
development  of  "  money, "  because  in  the  coined-milled 
metals  we  have  the  last  step  of  all;  but  I  have  some 
things  yet  to  tell  you  about  it. 

Although  one  would  think  that  in  coined  metal  pieces 
we  had  reached  perfection,  and  that  with  these  the 
masses  of  the  people  could  not  be  cheated  out  of  what 
is  so  essential  to  their  well-being, — "  honest  money, " — 
yet  one  way  was  found  to  defraud  the  people  even 
when  such  coin  was  used.  The  coins  have  sometimes 
been  "debased"  by  needy  governments  after  exhaust- 
ing wars  or  pestilence,  when  countries  were  really  too 


32  THE   EMPIRE   OF    BUSINESS 

poor  or  too  weak  to  recover  from  their  misfortunes. 
A  coin  is  called  a  "debased"  coin  when  it  does  not 
possess  metal  enough  to  bring  in  the  open  market  the 
sum  stamped  upon  the  coin  by  the  government. 
There  is  nothing  new  about  this  practice,  which  always 
cheats  the  masses.  It  is  very,  very  old.  Five  hundred 
and  seventy-four  years  before  Christ  the  Greeks  de- 
based their  coinage.  The  Roman  emperors  debased 
theirs  often  when  in  desperate  straits.  England  de- 
based hers  in  the  year  1,300.  The  Scotch  coin  was 
once  so  debased  that  one  dollar  was  worth  only  twelve 
cents.  The  Irish,  the  French,  German,  and  Spanish 
governments  have  all  tried  debased  coin  when  they 
could  wring  no  more  taxes  directly  out  of  their  people, 
and  had  therefore  to  get  more  money  from  t-hem  in- 
directly. It  was  always  the  last  resort  to  "debase" 
the  coinage.  These  instances  happened  long  ago. 
Nations  of  the  first  rank  in  our  day  do  not  fall  so  low. 
I  must  pause  to  make  one  exception  to  this  statement. 
I  bow  my  head  in  shame  as  I  write  it — the  republic  of 
the  United  States.  Every  one  of  its  silver  dollars  is  a 
"debased  coin."  When  a  government  issues  "de- 
based coin,"  it  takes  leave  of  all  that  experience  has 
proved  to  be  sound  in  regard  to  money,  Sound  finance 
requires  the  government  only  to  certify  to  the  real 
value  possessed  by  each  coin  issued  from  its  mints, 
so  that  the  people  may  not  be  cheated.  Every  time 
the  government  stamps  the  words  "One  Dollar"  upon 


THE    x\    B    C    OF    MONEY  S3 

371  1-4  grains  of  silver,  it  stamps  a  lie;  disgraceful, 
but,  alas  !  too  true,  for  the  silver  in  it  is  worth  to-day 
not  a  dollar,  but  only  seventy-eight  cents. 

Another  delusion  about  money  has  often  led  na- 
tions into  trouble — the  idea  that  a  government  could 
"make  money"  simply  by  stamping  certain  words 
upon  pieces  of  paper,  just  as  any  of  you  can  "make 
money"  by  writing  a  note  promising  to  pay  one  hun- 
dred dollars  on  demand.  But  you  know  that  when 
you  do  that,  you  are  not  "making  money,"  but  mak- 
ing "a  debt":  so  is  any  government  that  issues  its 
promise  to  pay.  And  there  is  this  about  both  the  in- 
dividual and  the  government  who  take  to  issuing 
such  notes  upon  a  large  scale:  they  seldom  pay  them. 
The  French  did  this  during  their  Revolution,  and  more 
recently  the  Confederate  States  "made  money"  at  a 
great  pace,  and  issued  bonds  which  are  now  scarcely 
worth  the  paper  they  are  printed  upon.  Every  ex- 
periment of  this  kind  has  proved  that  there  can  be  no 
money  "made"  where  there  is  not  value  behind  it. 
Our  own  country  issued  bonds,  and  the  people  of  other 
nations  bought  them  for  forty  cents  upon  the  dollar, 
although  they  bore  and  paid  interest  at  6  per  cent,  in 
gold,  so  great  was  the  fear  that  even  the  bonds  of  this 
country  would  not  prove  an  exception  to  the  usual 
fate  of  such  securities  issued  during  trying  times. 
Only  because  the  government  kept  strict  faith  and 
paid  the  interest  and  principal  of  these  bonds  in  gold, 


34  THE   EMPIRE   OF   BUSINESS 

and  never  in  silver  or  in  any  depreciated  currency,  has 
the  value  of  its  bonds  advanced,  and  the  credit  of  the 
United  States  become  the  highest  in  the  world,  ex- 
ceeding that  even  of  Great  Britain,  There  has  never 
been  a  better  illustration  of  the  truth  that  in  dealing 
with  "money,"  as  in  everything  else,  "honesty  is  the 
best  policy. "  Our  government  also  issued  some  notes 
known  as  "greenbacks."  But  the  wise  men  who  did 
this  took  care  to  provide  a  fund  of  one  hundred  millions 
of  dollars  in  gold  to  redeem  them,  so  that  any  man 
having  a  greenback  can  march  to  the  Treasury  and 
receive  for  it  one  dollar  in  gold. 

But  I  am  now  to  tell  you  another  quality  which  this 
basis-article  of  metal  has  proved  itself  to  possess,  which 
you  will  find  it  very  difficult  to  believe.  The  whole 
world  has  such  confidence  in  its  fixity  of  value  that 
there  has  been  built  upon  it,  as  upon  a  sure  founda- 
tion, a  tower  of  "credit"  so  high,  so  vast,  that  all  the 
silver  and  gold  in  the  United  States,  and  all  the  green- 
backs and  notes  issued  by  the  government,  only  per- 
form 8  per  cent,  of  the  exchanges  of  the  country.  Go 
into  any  bank,  trust  company,  mill,  factory,  store, 
or  place  of  business,  and  you  will  find  that  for  every 
one  hundred  thousand  dollars  of  business  transacted, 
only  about  eight  thousand  dollars  of  "money"  is 
used,  and  this  only  for  petty  purchases  and  payments. 
Ninety-two  per  cent,  of  the  business  is  done  with  little 
bits  of  paper — cheques,  drafts.     Upon  this  basis  also 


THE    A    B    C    OF    MONEY  35 

rests  all  the  government  bonds,  all  State,  county,  and 
city  bonds,  and  the  thousands  of  millions  of  bonds 
the  sale  of  which  has  enabled  our  great  railway  sys- 
tems to  be  built,  and  also  the  thousands  of  millions 
of  the  earnings  of  the  masses  deposited  in  savings- 
banks,  which  have  been  lent  by  these  banks,  to  various 
parties,  and  which  must  be  returned  in  " good  money" 
or  the  poor  depositor's  savings  will  be  partially  or 
wholly  lost. 

The  business  and  exchanges  of  the  country,  there- 
fore, are  not  done  now  with  "money" — with  the  ar- 
ticle itself.  Just  as  in  former  days  the  articles  them- 
selves ceased  to  be  exchanged,  and  a  metal  called 
"money"  was  used  to  effect  the  exchanges,  so  to-day 
the  metal  itself — the  ' '  money ' ' — is  no  longer  used .  The 
cheque  or  draft  of  the  buyer  of  articles  upon  a  store 
of  gold  deposited  in  a  bank — a  little  bit  of  paper — is 
all  that  passes  between  the  buyer  and  the  seller.  Why  is 
this  bit  of  paper  taken  by  the  seller  or  the  one  to  whom 
there  is  a  debt  due?  Because  the  taker  is  confident 
that  if  he  really  needed  the  article  itself  that  it  calls 
for — the  gold — he  could  get  it.  He  is  confident  also 
that  he  will  not  need  the  article  itself,  and  why  ?  Be- 
cause for  what  he  wishes  to  buy  the  seller  or  any  man 
whom  he  owes  will  take  his  cheque,  a  similar  little  bit 
of  paper,  instead  of  gold  itself;  and  then,  most  vital 
of  all,  every  one  is  confident  that  the  basis-article 
cannot  change  in  value.     For  remember  it  would  be 


36  THE   EMPIRE   OF   BUSINESS 

almost  as  bad  if  it  rose  in  value  as  if  it  fell ;  steadiness 
of  value  being  one  essential  quality  in  "money"  for 
the  masses  of  the  people. 

When,  therefore,  people  clamour  for  more  "money" 
to  be  put  in  circulation, — that  is,  for  more  of  the  ar- 
ticle which  we  use  to  effect  an  exchange  of  articles, — 
you  see  that  more  "money"  is  not  so  much  what  is 
needed.  Nobody  who  has  had  wheat  or  tobacco  or 
any  article  to  sell  has  ever  found  any  trouble  for  want 
of  "money"  in  the  hands  of  the  buyer  to  effect  the 
exchange.  We  had  a  very  severe  financial  disturb- 
ance in  this  country  only  three  months  ago.  ' '  Money, ' ' 
it  was  said,  could  not  be  had  for  business  purposes; 
but  it  was  not  the  metal  itself  that  was  lacking,  but 
"credit,"  confidence,  for  upon  that,  as  you  have  seen, 
all  business  is  done  except  small  purchases  and  pay- 
ments which  can  scarcely  be  called  "business"  at  all. 
To-day  the  business  man  cannot  walk  the  street  with- 
out being  approached  by  people  begging  him  to  take 
this  "credit"  at  very  low  rates  of  interest:  at  2  per 
cent,  per  annum  "money"  (credit)  can  be  had  day 
by  day.  There  has  been  no  considerable  difference 
in  the  amount  of  "money"  in  existence  during  the 
ninety  days.  There  was  about  as  much  money  in 
the  country  in  January  as  there  is  in  March.  It  was 
not  the  want  of  money,  then,  that  caused  the  trouble. 
The  foimdation  had  been  shaken  upon  which  stood 
the  ninety-two  thousand  of  every  one  hundred  thou- 


THE    A    B    C    OF    MONEY  37 

sand  dollars  of  business.  The  metal  itself  and  notes — 
real  "money,"  as  we  have  seen — only  apply  to  the 
eight  thousand  dollars.  Here  comes  the  gravest  of 
all  dangers  in  tampering  with  the  basis.  You  shake 
directly  the  foundation  upon  which  rests  92  per  cent, 
of  all  the  business  exchanges  of  the  country, — con- 
fidence, credit, — and  indirectly  the  trifling  8  per  cent, 
as  well  which  is  transacted  by  the  exchange  of  the  metal 
itself  or  by  government  notes;  for  the  standard  ar- 
ticle is  the  foundation  for  every  exchange,  both  the 
ninety-two  thousand  and  the  eight  thousand  dollars. 
So,  you  see,  if  that  be  undermined,  the  vast  structure, 
comprising  all  business,  built  upon  it,  must  totter. 

I  have  finished  telling  you  about  "money."  We 
come  now  to  apply  the  facts  to  the  present  situation, 
and  here  we  enter  at  once  upon  the  silver  question; 
and  I  am  sure  you  are  all  attention,  for  it  is  the  most 
pressing  of  all  questions  now  before  you.  You  see 
that  the  race,  in  its  progress,  has  used  various  articles 
as  "money,"  and  discarded  them  when  better  articles 
were  found,  and  that  it  has  finally  reached  coined 
pieces  of  valuable  metal  as  the  most  perfect  article. 
Only  two  metals  are  used  among  civilized  nations  as 
the  standard  metal — gold  in  some  countries,  silver 
in  others.  No  country  can  have  two  standards. 
Centuries  ago  silver  was  adopted  as  the  standard  in 
China,  India,  and  Japan,  and  more  recently  in  the 
South  American  republics;  and  it  still  is  the  standard 


38  THE   EMPIRE   OF   BUSINESS 

in  these  coiintries.  When  adopted  it  was  a  wise  choice ; 
silver  had  nearly  double  its  present  value,  and  was 
then  steady,  and  it  answered  all  the  needs  of  a  rural 
people. 

The  principal  nations  of  Europe  and  our  own  coun- 
try, being  further  advanced  and  having  much  greater 
business  transactions,  found  the  necessity  for  using  as  a 
standard  a  more  valuable  metal  than  silver,  and  gold 
was  adopted ;  but  as  silver  was  used  as  money  in  many 
parts  of  the  world  as  the  standard,  and  used  in  these 
gold-basis  countries  for  "small  change,"  it  was  ad- 
visable for  these  nations  to  agree  upon  the  value  in 
gold  which  would  be  accorded  to  silver,  and  this  was 
fixed  at  fifteen  and  one-half  ounces  of  silver  to  one  of 
gold.  Please  note  that  this  was  then  as  nearly  as 
possible  the  market  value  of  silver  as  a  metal  com- 
pared with  gold  as  a  metal.  The  nations  did  not  at- 
tempt to  give  to  silver  any  fictitious  value,  but 
only  its  own  inherent  value.  And,  more  than  this, 
each  of  these  nations  agreed,  when  the  agree- 
ment came  to  an  end,  to  redeem  all  the  silver 
coin  it  had  issued  in  gold  at  the  value  fixed.  Every- 
thing went  well  under  this  arrangement  for  a  long  time. 
The  more  advanced  nations  were  upon  a  gold  basis, 
the  less  advanced  nations  upon  a  silver  basis,  and 
both  were  equally  well  served. 

What,   then,   has  raised  this  silver  question  which 
everybody  is  discussing?     Just  this  fact:  that  while 


THE    A    B    C    OF    MONEY 


39 


the  supply,  and  therefore  the  value,  of  gold  remained 
about  the  same,  great  deposits  of  silver  were  discov- 
ered, wonderful  improvements  made  in  mining  ma- 
chinery, and  still  more  wonderful  in  the  machinery 
for  refining  silver  ore ;  and  as  more  and  more  silver  was 
produced  at  less  cost,  its  value  naturally  fell  more  and 
more ;  one  ounce  of  it,  worth  $1.33  in  1872,  being  worth 
to-day  only  $1.04.  It  has  fallen  as  low  as  93  cents. 
It  has  danced  up  and  down ;  it  has  lost  fixity  of  value. 
To  all  countries  upon  a  silver  basis  there  have  come 
confusion  and  disaster  in  consequence.  The  question 
in  India,  with  its  two  hundred  and  eighty-five  millions 
of  people,  is  most  serious ;  and  you  see  how  our  South 
American  republics  are  troubled  from  this  fall  in  the 
value  of  their  basis-article,  by  which  all  other  articles 
are  measured.  Even  the  European  nations  which 
are  upon  a  gold  basis  are  troubled  by  this  "silver 
question,"  for  under  the  agreement  to  rate  fifteen 
and  a  half  ounces  of  silver  as  worth  an  ounce  of  gold 
some  of  these  nations  have  had  enormous  amounts  of 
silver  thrust  upon  them.  Most  of  them  saw  what 
was  coming  many  years  ago,  and  ceased  to  increase 
their  silver :  some  disposed  of  a  great  deal  of  what  they 
had,  and  placed  themselves  strictly  upon  the  gold 
basis;  but  there  are  still  in  European  countries  eleven 
hundred  millions  of  dollars  of  silver  legal-tender  coins, 
not  counting  the  amount  of  "token"  silver  money 
used  for  small  change.     It  is  not  safe  to  say  that  less 


40  THE   EMPIRE   OF    BUSINESS 

than  twenty-five  ounces  of  it  would  be  found  equal  to 
one  ounce  of  gold  if  put  in  the  market,  instead  of  the 
fifteen-and-a-half-ounce  basis  upon  which  these  coun- 
tries have  obtained  it. 

All  European  countries  have  been,  and  are  still, 
trying  hard  to  escape  from  silver.  In  1878  those  com- 
prising the  Latin  Union,  which  fixed  the  price  of  sil- 
ver,— France,  Belgium,  Italy,  Switzerland,  and  Greece, 
— finally  closed  their  mints  to  legal-tender  silver. 
Norway,  Sweden  and  Denmark  in  1873  and  1875  ran 
out  from  under  the  silver  avalanche,  and  now  stand 
firmly  upon  a  gold  basis.  Holland  also,  in  1875,  took 
its  stand  practically  upon  gold.  Austria-Hungary 
has  not  coined  silver  since  1879,  except  a  small  amount 
of  "Levant  silver  thalers"  for  a  special  trade  purpose. 
Even  half -civilized  Russia  took  the  alarm,  and  ran 
as  fast  as  she  could  out  of  the  silver  danger,  for  in  1876 
she  shut  her  mints  to  the  further  coinage  of  the  dan- 
gerous metal,  except  such  small  amount  as  China 
wished  to  take  promptly  from  her.  So  you  see  that 
all  those  countries  that  have  tried  silver  and  found 
out  the  evils  which  it  produces,  and  its  dangers,  have 
been,  and  are  now,  using  every  means  to  rid  themselves 
of  it.  For  thirteen  years  it  has  been  cast  out  of  their 
mints,  for  during  this  long  period  no  full  legal-tender 
silver  coins  have  been  issued  in  Europe.  Only  our 
republic,  among  nations,  is  boldly  plunging  deeper 
and  deeper  into  the  dangers  of  silver  coinage.     When 


THE    A    B    C    OF    MONEY  41 

we  have  had  the  experience  of  older  nations  as  to  its 
operations,  we  may  and,  I  think,  surely  will  wish, 
like  them,  to  retrace  our  steps  when  it  is  too  late.  So, 
you  see,  there  is  trouble  wherever  there  is  silver.  What 
to  do  with  their  silver,  which  has  fallen  so  low  in  value, 
is  a  serious  problem  in  all  these  countries.  It  hangs 
like  a  dark  cloud  over  their  future. 

So  much  has  silver  fallen  in  all  parts  of  the  world 
and  disturbed  everything  that  several  conferences 
have  been  called  by  the  nations  in  recent  years,  to 
which  the  United  States  has  sent  delegates.  The  ob- 
ject of  these  was  to  see  whether  the  chief  commercial 
nations  could  not  agree  again  upon  a  new  gold  value 
for  silver.  But  the  conclusion  has  always  been  that 
it  was  too  dangerous  to  attempt  to  fix  a  new  value  for 
silver  until  it  could  be  more  clearly  seen  what  the 
future  was  to  show  about  its  supply  and  value,  for 
perhaps  it  might  fall  so  low  that  twenty-five  or  thirty 
ounces  of  it  would  not  be  worth  more  than  an  ounce 
of  gold;  no  one  can  tell.  As  our  country  has  already 
gone  so  far  into  the  danger  as  to  have  four  hundred 
and  eighty-two  millions  of  dollars  in  depreciated  silver, 
we  had  to  confer  with  our  neighbours  in  misfortune, 
and  appear  as  creditors  have  to  appear  at  meetings 
held  to  try  to  support  the  bad  business  of  a  failing 
debtor. 

Perhaps  you  are  asking  yourselves  why,  when  I 
spoke  of  all  the  European  countries  in  relation  to  sil- 


42  THE    EMPIRE    OF    BUSINESS 

ver,  I  did  not  state  the  amount  of  silver  held  in  re- 
serve by  our  principal  rival,  Great  Britain.  Listen 
one  moment,  and  then  ponder  over  the  reply.  Not 
one  dollar.  France  has  no  less  than  six  hundred  and 
fifty  millions  of  dollars  in  silver  in  her  bank ;  but  every 
dollar  of  Britain's  reserves  is  in  the  one  steady,  tin- 
changeable  basis-article — gold.  Wise  old  bird,  the 
dear  mother-land  sits  upon  her  perch,  whistling  away 
out  of  all  danger  from  this  silver  trouble.  She  has 
made  London  the  financial  centre  of  the  world.  If  any- 
thing be  bought  or  sold  in  foreign  lands,  a  draft  upon 
London  is  demanded;  because  everyone  knows  that, 
come  what  may,  it  will  be  paid  in  the  best  article, 
which  cannot  fall  in  value — gold.  No  draft  upon 
Paris  or  Vienna  or  New  York  for  wise  men.  Why? 
Because  the  nations  represented  by  these  cities  have 
become  involved  in  great  possible  losses  by  their  huge 
piles  of  silver,  and  may  attempt  by  legislation  to  make 
drafts  payable  in  that  metal,  which  fluctuates  so  in 
value. 

I  wish  the  people  of  the  United  States  would  watch 
Britain  carefully.  She  is  keeping  her  own  counsel; 
she  is  treating  the  silver-loaded  nations  with  cool  polite- 
ness in  the  conferences,  which  she  graciously  conde- 
scends to  attend  only  because  India,  over  which  she 
rules,  is  unfortunately  upon  a  silver  basis;  if  it  were 
not  for  that,  she  would  probably  politely  decline. 
When  they  talk  about  fixing  a  gold  value  upon  silver, 


THE    A    B    C    OF    MONEY  43 

she  says  that  she  really  does  not  know  what  she  will 
decide  upon  in  the  matter.  What  she  is  praying  for 
is  that  the  United  States  will  continue  to  go  deeper 
and  deeper  into  silver  until  retreat  is  impossible,  and 
she  will  keep  her  old  policy,  which  has  made  her  su- 
preme in  finance.  Her  only  possible  rival  is  not  to  be 
found  in  Europe,  but  here  in  the  United  States.  What 
a  grand  thing  for  Britain  if  our  country  could  be  brought 
down  to  a  silver  basis — forced  to  relinquish  the  one 
standard  which  can  alone  give  a  nation  front  rank  in 
the  financial  world  !  Silver  for  the  republic,  Gold  for 
the  monarchy:  this  is  what  great  Britain  is  hoping 
may  come  to  pass,  and  what  every  American  should 
resolve  never  shall.  Governments  may  pass  what 
laws  they  please  about  silver:  the  world  heeds  them 
not.  Every  business  transaction  between  nations 
continues  to  be  based  on  gold  exclusively — nothing 
but  gold — and  will  so  continue.  Britain  knows  this 
and  acts  accordingly. 

I  think  I  hear  you  ask  indignantly:  "How  came 
our  country  to  have  three  hundred  and  twelve  millions 
of  silver  dollars  in  its  vaults,  like  France,  instead  of 
having  its  reserves  in  the  sure  gold,  like  our  rival, 
Britain,  when,  like  Britain,  we  have  gold  as  our  basis  ?" 
That  is  a  question  every  farmer  and  every  toiler  should 
ask,  and  demand  an  answer  to,  from  his  representa- 
tive in  Congress.  The  reason  is  easily  given.  Here 
is  the  history.     Silver,  as  we  have  seen,  had  fallen  in 


44  THE    EMPIRE    OF    BUSINESS 

value,  and  was  likely  to  fall  still  more.  European 
nations  were  loaded  down  with  many  hundreds  of 
millions  of  dollars,  and  all  anxious  to  get  rid  of  it; 
owners  of  silver  and  of  silver  mines  were  alarmed; 
what  was  to  be  done  to  prop  the  falling  metal?  Evi- 
dently the  government  was  the  only  power  which  could 
undertake  the  task ;  and  towards  that  end  all  the  in- 
fluence and  resources  of  the  silver  power  were  bent — 
alas !  with  eminent  success ;  for  the  masses  of  the  peo- 
ple were  represented  as  in  favour  of  silver.  If  true, 
they  were  going  with  the  speculators  against  their  own 
interests,  in  the  most  direct  way  possible. 

The  first  act  which  aimed  to  give  by  legislation  a 
value  to  silver  was  passed  in  1878.  It  required  our 
government  to  buy  at  least  two  million  ounces  of  silver 
every  month,  while  all  other  governments  had  stopped 
coining  it,  because  it  had  become  dangerously  erratic 
in  value.  The  silver  men  insisted  that  these  pur- 
chases would  raise  its  value ;  but  were  they  right  ?  No. 
It  did  not  advance  in  price.  What  was  to  be  done 
then?  "Ah!"  said  these  silver-tongued  specula- 
tors, "the  trouble  is,  the  government  has  not  gone 
far  enough;  only  increase  the  amount  ;  let  the  gov- 
ernment buy  four  and  a  half  million  ounces  per  month 
of  our  silver  instead  of  two  million  per  month,  and  this 
will  take  all  that  the  country's  mines  yield,  and  more 
too,  and  so  silver  must  advance  in  value. "  They  were 
right  in  stating  that  four  and  a  half  millions  per  month 


THE    A    B    C    OF    MONEY  45 

are  more  than  the  total  yield  of  the  United  States  sil- 
ver mines ;  and  then  eight  to  ten  millions  of  silver  are 
taken  and  used  every  year  for  other  purposes  than 
coining  into  "money,"  leaving  not  more  than,  say,  four 
millions  per  month  for  coinage.  Many  people  were 
persuaded  that  if  the  government  bought  so  much  sil- 
ver per  month  the  value  of  silver  must  advance.  The 
price  did  advance,  because  many  of  these  mistaken 
people  bought  it  upon  speculation  before  the  bill 
passed.  Silver  rose  from  96  to  121 — almost  to  its  old 
rate  in  gold. 

But  what  has  been  the  result  since  the  passage  of 
the  new  bill?  The  answer  is  found  in  the  quotation 
for  silver  to-day.  It  is  back  from  121  to  97,  and  here 
we  are  again.  So,  instead  of  being  free  from  the  silver 
trouble,  as  Britain  is  and  we  should  have  been,  these 
men  have  succeeded  in  unloading  upon  the  govern- 
ment already  three  hundred  and  ninety  millions  of 
dollars  of  their  silver,  and  we  are  getting  almost  as  badly 
ofl  as  France;  but  with  this  difference:  France  and 
other  nations  prudently  stopped  adding  to  their  bur- 
dens of  silver  thirteen  years  ago,  while  our  govern- 
ment is  adding  to  its  store  four  and  one-half  millions 
of  ounces  every  month,  costing  a  little  more  than  that 
amount  of  dollars.  The  United  States  is  trying  to 
ignore  the  changed  position  of  silver,  and  to  make  it 
equal  to  gold,  against  the  judgment  of  all  other  first- 
class  nations.     To    succeed,  we  shall  have  to  buy  not 


46  THE   EMPIRE   OF    BUSINESS 

only  what  our  own  mines  produce,  but  a  great  deal  of 
what  all  other  mines  produce  throughout  the  world, 
the  total  yield  of  silver  being  enough  to  make  one  hun- 
dred and  sixty-eight  millions  of  our  silver  dollars  every 
year;  and  then  we  must,  in  addition,  be  prepared  to 
buy  the  eleven  hundred  millions  of  dollars'  worth  with 
which  European  governments  are  now  loaded  down, 
and  which  they  are  anxious  to  sell. 

So  far  from  the  government  purchases  of  silver  hav- 
ing raised  its  value,  the  government  could  not  to-day 
sell  the  three  hundred  and  thirteen  millions  of  dollars' 
worth  in  its  vaults  without  losing  some  millions  upon 
the  price  it  has  paid  the  silver-owners  for  it.  You 
will  scarcely  believe  that  the  accounts  of  the  treasury 
state  that  the  government  has  made,  so  far,  sixty- 
seven  millions  of  profit  upon  its  silver  purchases.  This 
is  claimed  because  for  the  amount  of  silver  put  in  a 
dollar  it  has  paid  only  about  eighty  cents.  All  this 
"profit"  is  fictitious.  You  see,  the  nation  has  been 
led  into  very  foolish  purchases  of  silver.  Four  and  a 
half  millions  of  your  earnings  are  taken  through  taxes 
every  month,  not  for  the  constitutional  purposes  of 
government,  but  in  an  effort  to  bolster  a  metal  by 
paying  prices  for  it  far  higher  than  it  otherwise  would 
command.  Your  government  is  being  used  as  a  tool 
to  enrich  the  owners  of  silver  and  silver  mines.  This 
is  bad  indeed,  but  hardly  worth  mentioning  compared 
with  the  danger  of  panic  and  disaster  it  brings  with 


THE    A    B    C    OF    MONEY  47 

it  through  the  probable  banishment  of  the  steady  gold 
basis  and  the  introduction  of  the  unsteady  basis  of  silver. 
The  republic  had  the  disgrace  of  slavery,  and  abol- 
ished it.  Until  this  year  it  was  disgraced  in  the  eyes 
of  the  world  because  it  had  no  law  which  secured  to 
others  than  its  own  citizens  the  right  to  their  literary 
productions.  That  disgrace  has  passed  away  also; 
but  there  has  come  upon  it  the  disgrace  of  "debased 
coinage."  The  great  republic  issues  dishonest  coin, 
and  it  is  the  only  nation  in  the  world  which  does  so, 
except  Mexico,  which  still  coins  a  little  silver.  But 
while  the  disgrace  is  upon  us,  the  financial  evils  of  "de- 
based" coinage  are  yet  to  come;  for,  although  the  gov- 
ernment issues  debased  coin,  it  agrees  to  receive  it  as 
worth  a  dollar  in  payment  of  duties  and  taxes,  and 
makes  it  legal  tender,  and  so  it  passes  from  hand  to 
hand  for  the  present  as  worth  dollars.  In  this  way 
the  government  has  been  able  so  far  to  prevent  its  de- 
preciation. How  long  it  can  continue  issuing  four 
and  a  half  millions  more  of  these  notes  or  coins  every 
month  and  keep  them  equal  to  gold  nobody  can  tell. 
But  one  thing  is  clear:  ultimately  the  load  must  be- 
come too  heavy,  and,  unless  silver  rises  in  value,  or 
enough  is  put  into  the  dollars  to  represent  their  value 
in  gold,  or  the  purchase  of  silver  by  the  government 
is  stopped,  we  must  sooner  or  later  fall  from  the  gold 
basis  to  the  condition  of  the  Argentine  and  other  South 
American  republics. 


48  THE   EMPIRE   OF    BUSINESS 

This  is  how  these  silver  dollars  will  act  which  have 
not  metal  enough  to  sell  for  dollars  when  the  world 
begins  to  lose  confidence  in  the  ability  of  the  govern- 
ment issuing  them  to  pay  gold  for  them  when  asked. 
Suppose  a  number  of  you  had  decided  to  carry  a  huge 
log  from  the  woods,  and  you  all  got  under,  and,  bend- 
ing your  necks,  took  its  weight  upon  your  shoulders, 
and  then  some  doubted  whether  you  really  could 
stagger  on  under  the  load ;  and  suppose  two  or  three  of 
you,  after  casting  timid  glances  at  each  other,  con- 
cluded you  had  better  get  from  under:  what  would  be 
the  result?  The  lack  of  confidence  would  probably 
result  in  killing  those  who  were  foolish  enough  to  re- 
main. It  is  just  so  with  this  delicate  question  of  the 
measure  of  values.  A  few  speculators  or  "gold-bugs" 
will  resolve  that,  come  what  may,  they  will  make 
themselves  safe  and  get  from  under. 

Even  in  the  mind  of  the  most  reckless  there  will  be 
some  doubt  whether  the  United  States  alone  can  take 
the  load  of  the  world  upon  its  shoulders  and  carry  it, 
when  all  the  other  nations  together  are  afraid  to  try 
it,  and  when  no  nation  in  the  history  of  the  world  has 
ever  succeeded  in  giving  permanent  value,  as  a  stand- 
ard for  money,  to  a  metal  that  did  not  in  itself  possess 
that  value.  Mark  this :  that  our  government  has  only 
succeeded  so  far  in  doing  this  with  its  silver  dollars 
because  it  has  issued  only  a  limited  quantity,  and  has 
been  able  to  redeem  them  in  gold — just  as  you  could 


THE    A    B    C    OF    MONEY 


49 


take  a  piece  of  paper  and  write  on  it,  "  This  is  good  for 
one  dollar,  and  I  promise  to  pay  it."  That  would  be 
your  "fiat"  money.  The  question  is.  How  long  could 
you  get  people  to  take  these  slips  for  dollars?  How 
soon  would  some  suspicious  man  suggest  that  you  were 
issuing  too  many?  And  then  these  slips  would  lose 
reputation ;  people  would  begin  to  doubt  whether  you 
could  really  pay  all  the  dollars  promised  if  called  upon ; 
and  from  that  moment  you  could  issue  no  more.  Just 
so  with  governments :  all  can  keep  their  small  change 
afloat,  although  it  may  not  contain  metal  equal  to  its 
face  value ;  and  it  is  a  poor  government  which  cannot 
go  a  little  further  and  get  the  world  to  take  something 
from  it  in  the  shape  of  "money"  which  is  only  par- 
tially so.  But  then,  remember,  any  government  will  soon 
exhaust  its  credit  if  it  continues  to  issue  as  "money" 
anything  but  what  has  intrinsic  value  as  metal  all  the 
world  over.  Every  nation  has  had  eventually  to  re- 
coin  its  "debased"  coin  or  repudiate  its  obligations, 
and  go  through  the  perils  and  disgrace  of  loss  of  credit 
and  position.  In  many  instances  the  "debased"  coin 
never  was  redeemed,  the  poor  people  who  held  it  being 
compelled  to  stand  the  loss. 

There  is,  however,  one  valuable  feature  of  the  present 
silver  law  which,  if  not  changed,  may  stop  the  issue 
of  many  more  "debased  silver  dollars."  It  requires 
that  two  milHons  of  the  four  and  a  half  millions  of 
ounces  of  silver  purchased  each  month  shall  be  coined 


50  THE   EMPIRE   OF   BUSINESS 

into  money  for  one  year.  After  that,  only  such 
amounts  are  to  be  coined  as  are  found  necessary  to 
redeem  the  silver  notes  issued.  As  people  prefer  the 
notes  to  the  silver,  little  or  no  coinage  of  silver  dollars 
will  be  necessary,  and  only  silver  notes  will  be  issued. 
When  the  government  ceases  to  coin  silver  dollars,  it 
will  stand  forth  in  its  true  character  before  the  peo- 
ple— that  of  a  huge  speculator  in  silver,  or,  rather, 
as  the  tool  of  silver  speculators,  piling  up  in  its  vaults 
every  month  four  and  a  half  millions  of  ounces,  not 
in  the  form  of  "  money, "  but  in  bars.  Surely  this  can- 
not fail  to  awaken  the  people  to  the  true  state  of  affairs, 
and  cause  them  to  demand  that  the  reckless  specula- 
tion shall  cease. 

It  is  in  every  respect  much  less  dangerous,  however, 
to  keep  the  silver  purchased  in  bullion  than  to  coin  it 
in  "debased  dollars,"  because  it  renders  it  easier  at 
some  future  day  to  begin  the  coinage  of  honest  silver 
dollars — that  is,  coins  containing  the  amount  of  silver 
metal  that  commands  a  dollar  as  metal;  instead  of  371 
grains  of  silver,  450,  or  460,  or  more  or  less,  should  be 
used.  This  is  just  about  the  amount  the  government 
gets  for  each  dollar.  No  possible  act  of  legislation 
that  I  know  of  would  produce  such  lasting  benefit  to 
the  masses  of  the  people  of  this  country.  But  beyond 
material  benefit  something  much  higher  is  involved — 
the  honour  of  the  republic.  The  stamp  of  its  govern- 
ment should  certify  only  that  which  is  true. 


THE    A    B    C    OF    MONEY  51 

I  do  not  suppose  that  there  are  many  men  in  the 
United  States,  except  owners  of  silver,  who  would 
vote  that  silver  take  the  place  of  gold  as  the  standard 
of  value.  If  the  people  understood  that  the  question 
was  whether  the  one  metal  or  the  other — silver  or 
gold — should  be  elected  as  the  standard,  the  vote  would 
be  almost  unanimous  for  gold,  its  superiority  is  so 
manifest.  Yet  such  is  surely  the  issue,  although  the 
advocates  of  silver  disclaim  any  intention  to  disturb 
the  gold  standard,  saying  they  only  desire  to  elevate 
silver  and  give  it  the  position  which  gold  has  as  money. 
But  you  might  as  well  try  to  have  two  horses  come  in 
* '  first "  in  a  race  or  to  have  two  ' '  best ' '  of  anything.  You 
might  as  well  argue  for  two  national  flags  in  one  coun- 
try. Just  as  surely  as  the  citizen  has  to  elect  the  ban- 
ner under  which  he  stands  or  falls,  so  surely  must  he 
elect  gold  or  silver  for  his  financial  standard.  The 
standard  article  cannot  be  made  to  share  its  throne 
with  anything  else,  any  more  than  the  stars-and- 
stripes  can  be  made  to  share  its  sovereignty  with  any 
other  flag  in  its  own  country ;  for  there  is  this  law  about 
"money":  the  worst  drives  the  best  from  the  field. 
The  reason  for  this  is  very  clear. 

Suppose  you  get  in  change  a  five-dollar  gold  piece 
and  five  dollars  in  silver,  and  there  is  some  doubt 
whether  an  act  of  Congress  will  really  prove  effective 
in  keeping  silver  equal  to  gold  in  value  forever:  ninety- 
nine  people  out  of  a  hundred  may  think  that  the  law 


52  THE   EMPIRE   OF    BUSINESS 

will  give  this  permanent  value  to  silver,  which  the 
article  itself  does  not  possess;  but  one  man  in  a  hun- 
dred may  have  doubts  upon  the  subject.  I  think  the 
more  a  man  knows  about  "money,"  the  more  doubts 
he  will  have;  and,  although  you  may  have  no  doubts, 
still  the  fact  that  I  have  doubts,  for  instance,  will  lead 
you  to  say:  "Well,  he  may  be  right;  it  is  possible  I 
may  be  wrong.  I  guess  I  will  give  Smith  this  silver 
for  my  groceries  to-morrow,  and  give  the  old  lady  this 
beautiful  bright  golden  piece  to  put  by;  it  needs  no 
acts  of  Congress — all  the  acts  of  Congress  in  the  world 
cannot  lessen  its  value;  the  metal  in  it  is  worth  five 
dollars  anywhere  in  the  world,  independent  of  the  gov- 
ernment stamp;  these  five  pieces  of  silver  are  worth 
only  three  dollars  and  seventy-five  cents  as  metal. 
Yes,  I  shall  let  Smith  have  the  silver — gold  is  good 
enough  for  me.'* 

And  you  may  be  sure  Smith  unloads  the  silver  as 
soon  as  he  can  upon  Jones.  And  many  people  will 
believe  and  act  so,  and  the  gold  in  the  country  will 
disappear  from  business,  and  silver  alone  will  be  seen 
and  circulate ;  every  man  that  gets  it  giving  it  to  another 
as  soon  as  he  can,  and  so  keeping  it  in  active  circula- 
tion; and  every  man  that  gets  a  bit  of  gold  holding 
it,  and  thus  keeping  it  out  of  circulation.  So  instead 
of  having  more  money,  if  we  go  in  for  trying  by  law  to 
force  an  artificial  value  upon  silver  in  order  to  use  it 
as  money,  we  shall  really  soon  have  less  money  in  cir- 


THE    A    B    C    OF    MONEY  53 

culation.  The  seven  hundred  millions  of  gold  which 
is  now  in  circulation,  and  which  is  the  basis  of  every- 
thing, will  speedily  vanish,  the  vast  structure  of  credit 
built  upon  it  be  shaken,  and  the  masses  of  the  people 
compelled  to  receive  silver  dollars  worth  only  seventy- 
eight  cents,  instead  of  being,  as  now,  redeemable  in 
gold  and  always  worth  one  hundred  cents.  For,  re- 
member, as  I  have  told  you,  92  per  cent,  of  all  opera- 
tions conducted  by  "money"  depends  upon  people 
having  absolute  confidence  in  the  "money"  being  of 
unchangeable  value. 

Issue  one  hundred  dollars  of  "debased"  coin  more 
than  all  men  are  sure  can  be  kept  of  unchangeable 
value  with  gold — panic  and  financial  revolution  are 
upon  you.  More  "money,"  you  see,  which  could  only 
be  used  in  8  per  cent,  of  our  smallest  financial  trans- 
actions, can  easily  be  so  issued  as  to  overwhelm  all  the 
important  business  of  the  country  by  shaking  "con- 
fidence, "  upon  which  92  per  cent,  rests.  To  be  always 
free  from  danger  is  to  issue  only  such  "money"  as  in 
itself  has  all  the  value  certified  by  the  stamp  upon  it. 
So  jealously  does  Britain,  our  only  rival,  adhere  to 
this  that  she  is  spending  two  millions  of  dollars  just 
now  to  recoin  gold  coins  which  have  lost  a  few  cents 
of  their  value  by  wear.  Her  government  stamp  must 
always  tell  the  truth.  The  republic  should  not  be  less 
jealous  of  its  honor. 

As  you  have  seen,  the  silver-men  were  disappointed 


54  THE   EMPIRE   OF    BUSINESS 

at  the  failure  of  acts  of  Congress  to  advance  the  value 
of  their  silver.     Twice  the  government  has  been  in- 
duced to  do  as  they  asked,  under  assurances  that  com- 
pliance would  surely  get  the  country  out  of  its  danger- 
ous position  as  the  owner  of  silver;  twice  it  has  been 
deceived.     You  would  think  the  silver-owners  would 
now  admit  their  error  and  help  the  government  to  get 
back  to  safe  ground  with  as  little  loss  as  possible.     Far 
from  it;  instead  of  this  they  have  taken  the  boldest 
step  of  all,  and  urged  upon  Congress  what  you  have 
heard  a  great  deal  about — the  "  free  coinage  of  silver. " 
Now,  what  does  that  mean  ?     It  means  that  our  gov- 
ernment is  to  be  compelled  by  law  to  open  its  mints 
and  take  all  the  silver  with  which  European  govern- 
ments are  loaded  down,  and  part  of  all  the  silver  mined 
in  the  world,  and  give  for  every  seventy-eight  cents' 
worth  of  it  one  of  these  coins,  which  you  are  compelled 
to  take  as  a  full  dollar  for  your  labour  or  products.  It 
means  that  the  European  merchant  will  send  silver 
over  here,  get  it  coined  at  our  mints  or  get  a  silver- 
dollar  note  for  it,  and  then  buy  a  full  dollar's  worth 
of  your  wheat  or  com,  or  anything  he  wants,  for  the 
silver  he  could  get  only  seventy-eight  cents  for  in 
Europe  or  anywhere  else  in  the  world.     Europe  is 
doing  this  every  day  just  now  with  India,  the  Argen- 
tine Republic,  and  other  countries  upon  a  silver  basis. 
The  British  merchant  buys  wheat  in  India  upon  the 
depreciated  silver  basis,  takes  it  to  Europe,  and  sells  it 


THE    A    B    C    OF    MONEY  55 

upon  the  gold  basis.  He  has  thus  to  pay  so  little  for 
Indian  wheat  that  it  has  become  a  dangerous  com- 
petitor to  our  own  in  Europe,  which  it  could  not  be 
except  that  by  the  fall  in  silver  the  Indian  farmer  gets 
so  little  value  for  his  products. 

It  is  only  a  few  months  since  the  new  Silver  Bill  was 
passed  requiring  the  government  to  more  than  double 
its  purchases,  and  already  eight  millions  of  dollars  of 
silver  more  than  we  have  exported  has  been  sent  into 
this  country  from  abroad — something  unknown  for 
fifteen  years,  for  we  have  always  exported  more  silver 
than  we  have  imported.  Now  we  are  buying  all  our 
own  mines  furnish,  and  being  burdened  with  some 
from  Europe,  for  which  we  should  have  received  gold. 
In  eighteen  days  of  the  month  of  April  we  have  sent 
abroad  nine  millions  of  dollars  in  gold ;  so  that  under 
our  present  Silver  Law  you  see  Europe  has  already 
begim  to  send  us  her  depreciated  silver  and  rob  us  of 
our  pure  gold — a  perilous  exchange  for  our  country 
and  one  which  should  fill  our  legislators  with  shame. 
Understand,  please,  that  hitherto,  under  both  bills 
compelling  the  government  to  buy  silver,  bad  as  these 
were,  yet  the  government  has  got  the  metal  at  the 
market  price,  now  about  seventy-eight  cents  for  371  1-4 
grains ;  and  only  this  amount  the  government  has  put 
into  the  so-called  dollar.  Under  "free  coinage"  all 
this  will  change.  The  owner  of  the  silver  will  then 
get  the  dollar  for  seventy-eight  cents'  worth  of  silver. 


56  THE   EMPIRE   OF    BUSINESS 

For  pure,  cool  audacity  I  submit  that  this  proposition 
beats  the  record;  and  yet  when  the  Farmers'  Alliance 
shouts  for  free  coinage,  this  is  exactly  what  it  supports 
— a  scheme  to  take  from  the  people  twenty-two  cents 
upon  each  dollar  and  put  it  into  the  pockets  of  the 
owners  of  silver.  Surely  you  will  all  agree  that  if 
seventy-eight  cents'  worth  of  silver  is  to  be  made  a 
dollar  by  the  government,  then  the  government,  and 
not  the  silver-owner,  should  get  the  extra  twenty-two 
cents'  profit  on  each  coin,  if  it  succeeds.  The  govern- 
ments needs  it  all ;  for,  as  I  told  you  before,  the  silver 
bought  by  the  government  only  at  market  value  could 
not  be  sold  to-day  without  a  loss  of  millions. 

If  the  free  coinage  of  silver  becomes  law,  our  farmers 
will  find  themselves  just  in  the  position  of  the  Indian 
farmer ;  and  yet  we  are  told  that  they  are  in  favour  of 
silver.  If  this  be  true,  there  can  be  only  one  reason 
for  it — they  do  not  undestand  their  own  interests. 
No  class  of  our  people  is  so  deeply  interested  in  the 
maintenance  of  the  gold  standard  and  the  total  sweep- 
ing-away  of  silver  purchases  and  debased  coinage  as 
the  farmer,  tor  many  of  his  products  are  sold  in  coun- 
tries that  are  upon  the  gold  basis.  If  the  American 
farmer  agrees  to  take  silver  in  lieu  of  gold,  he  will  en- 
able the  Liverpool  merchant  to  buy  upon  the  lower 
silver  basis,  at  present  seventy-eight  cents  for  the  dol- 
lar ;  while  for  all  the  articles  coming  from  abroad  that 
the  farmer  buys  he  will  have  to  pay  upon  the  gold 


THE    A    B    C    OF    MONEY  57 

basis.  He  will  thus  have  to  sell  cheap  and  buy  dear. 
This  is  just  what  is  troubling  India  and  the  South 
American  republics.  Prices  for  this  season's  crops 
promise  to  be  higher  than  for  years.  See  that  you  get 
these  upon  the  gold  basis. 

Open  our  mints  to  the  free  coinage  of  silver,  and  thus 
offer  every  man  in  the  world  who  has  silver  to  sell  a 
one-dollar  coin  stamped  by  the  government,  and 
taken  by  it  for  all  dues,  for  which  he  gives  only  371  1-2 
grains  of  silver,  worth  seventy-eight  cents,  and  every 
silver  mine  in  the  world  will  be  worked  day  and  night 
and  every  pound  of  silver  obtained  hurried  to  our 
shores.  The  nations  of  Europe,  with  eleven  hundred 
millions  of  depreciated  silver  already  on  hand,  will 
promptly  unload  it  upon  us;  they  will  demand  gold 
from  us  for  all  that  we  buy  from  them,  and  thus  rob 
us  of  our  gold  while  we  take  their  silver.  With  "free 
coinage"  in  sight,  we  shall  fall  from  the  gold  to  the 
silver  basis  before  the  bill  is  passed.  The  last  words 
of  the  late  lamented  Secretary  Windom  will  prove 
true: — 

"Probably  before  the  swiftest  ocean  greyhound  could  land  its 
silver  cargo  in  New  York,  the  last  gold  dollar  within  reach  would 
be  safely  hidden  in  private  boxes  and  in  the  vaults  of  safe-deposit 
companies,  to  be  brought  out  only  by  a  high  premium  for  exporta- 
tion. " 

It  is  a  dangerous  sea  upon  which  we  have  embarked. 
You  should  ask  yourselves  why  you  should  endanger 
the  gold  basis  for  silver.     Does  any  one  assert  that 


58  THE   EMPIRE   OF    BUSINESS 

the  silver  basis  would  be  better  for  you  or  for  the 
country?  Impossible.  No  one  dares  go  so  far  as 
this.  All  that  the  wildest  advocate  of  the  change  ven- 
tures to  say  is  that  he  believes  that  silver  could  be 
made  as  good  as  gold.  Everybody  knows  that  noth- 
ing could  be  made  better.  Let  us  ask  why  any  one 
but  an  owner  of  silver  should  wish  silver  to  be  made 
artificially  anything  else  than  it  is  intrinsically.  What 
benefit  to  any  one,  except  the  owner  of  silver,  that 
the  metal  silver  should  not  remain  where  natural 
causes  place  it,  like  the  metals  copper  and  nickel? 
Why  should  it  be  credited  with  anything  but  its  own 
merits  ?  There  was  no  prejudice  in  the  mind  of  any  one 
against  it.  It  has  had  a  fair  race  with  gold ;  the  field 
is  always  open  for  it,  or  for  any  metal,  to  prove  itself 
better  suited  for  the  basis  of  value.  If  silver  became 
more  valuable  in  the  market  and  steadier  in  value 
than  gold,  it  would  supplant  gold.  Why  not  give  the 
position  to  the  metal  that  wins  in  fair  competition? 
Gold  needs  no  bolstering  by  legislation;  it  speaks  for 
itself.  Every  gold  coin  is  worth  just  what  it  pro- 
fesses to  be  worth  in  any  part  of  the  world ;  no  doubt 
about  it ;  no  possible  loss ;  and  what  is  equally  import- 
ant, no  possible  speculation ;  its  value  cannot  be  raised 
and  cannot  be  depressed.  The  speculator,  having 
no  chance  to  gamble  upon  its  ups  and  downs,  does  not 
favour  it ;  but  this  is  the  very  reason  you  should  favour 
that  which  gives  you  absolute  security  of  value  all  the 


THE    A    B    C    OF    MONEY  59 

time.  Your  interests  and  the  interests  of  the  specu- 
lator are  not  the  same.  Upon  your  losses  he  makes 
his  gains. 

One  reason  urged  why  silver  should  be  purchased 
and  coined  is  that  the  country  has  not  enough  "money," 
and  that  free  coinage  of  silver  will  give  it  more.  But 
if  we  need  more  "money,"  the  only  metal  which  it  is 
wise  to  buy  is  gold.  Why  issue  your  notes  for  silver, 
which  is  falling  in  value  and  involves  unknown  dangers, 
when  for  these  same  notes  you  can  get  the  solid,  pure 
article  itself,  real  money,  gold,  which  cannot  possibly 
entail  a  loss  upon  the  country  ?  But  is  it  true  that  the 
country  has  not  enough  "money"? — that  is,  you 
remember,  the  coined  article  used  for  exchanging  other 
articles.  If  so,  it  is  a  new  discovery.  We  have  not 
suffered  for  want  of  coined  money  in  times  past,  and 
yet  there  is  for  each  man,  woman,  and  child  five  dollars 
more  "money"  in  circulation  than  there  ever  was. 
We  have  more  circulating  medium — that  is,  "money" 
— per  head  than  any  country  in  Europe,  with  one  ex- 
ception, France,  where  the  people  do  not  use  cheques 
and  drafts  as  much  as  other  similar  countries — a  fact 
which  makes  necessary  many  times  more  coined 
money  than  we  require.  Still  there  is  little  objection 
to  having  just  as  much  coined  money  as  is  desired,  pro- 
vided it  is  not  debased,  but  honest  money ;  and  the  only 
way  to  be  sure  of  that  is  to  buy  gold  and  coin  it  into 
"money" — not  silver,  the  future  value  of  which  is  so 


6o  THE   EMPIRE   OF   BUSINESS 

doubtful,  and  the  purchases  of  which  have  so  far  been 
a  losing  speculation.  Ask  the  advocate  of  more  money 
why  gold  is  not  the  best  metal  for  the  government  to 
buy  and  coin  into  money  for  the  people,  and  see  what 
he  has  to  say.  Gold  is  as  much  an  American  product 
as  silver ;  our  mines  furnish  more  than  two  millions  of 
dollars  of  it  every  month.  He  could  have  no  objec- 
tion except  that  this  would  not  tend  to  keep  up  the 
price  of  his  own  product,  silver.  He  could  not  deny 
that  it  would  give  safer  money  for  the  people. 

There  is  another  plea  urged  on  behalf  of  silver. 
Many  public  men  tell  us  that  silver  coinage  "is  in  the 
air,"  that  people  want  it  because  they  think  that  it 
will  make  money  "cheap,"  and  that,  silver  being  less 
valuable  than  gold,  the  debts  of  people  could  be  more 
easily  paid.  But  let  me  call  your  attention  to  one 
point  just  here.  The  savings  and  the  property  of  the 
people  could  only  be  thus  reduced  in  value  if  the  gold 
standard  fell.  As  long  as  all  government  notes  were 
kept  equal  to  gold,  as  at  present,  no  matter  what 
amount  of  silver  the  government  bought  or  coined, 
not  the  slightest  change  is  possible.  Only  after  the 
financial  crisis  had  come,  and  the  gold  standard  had 
gone  down  in  the  wreck,  and  every  dollar  of  gold  was 
withdrawn  and  held  for  high  premiums,  could  any 
change  occur  to  favour  one  class  or  another.  If  any 
man  is  vaguely  imagining  that  he  is  to  save  or  make 
in  some  way  by  the  government  becoming  involved 


THE    A    B    C    OF    MONEY  6i 

in  trouble  with  its  debased  silver  coin  and  silver  pur- 
chases, let  him  remember  that,  in  order  that  this  vain 
expectation  can  be  realized,  there  must  first  come  to 
his  government  a  loss  of  ability  to  make  good  its  de- 
termination to  keep  its  silver  dollar  equal  to  gold,  when 
gold  would  at  once  vanish  and  command  a  premium. 
A  wise  Secretary  of  the  Treasury  has  truly  foretold 
the  result: — 

"This  sudden  retirement  of  $600,000,000  of  gold,  with  the  ac- 
companying panic,  would  cause  contraction  and  commercial  dis- 
aster imparallelled  in  human  experience,  and  our  country  would 
at  once  step  down  to  the  silver  basis,  when  there  would  no  longer 
be  any  inducement  for  coinage,  and  silver  dollars  would  sink  to 
their  bullion  value." 

The  man  who  tries  to  bring  about  this  disaster  in  the 
hope  to  profit  by  it  is  twin  brother  to  him  who  would 
wreck  the  express  train  for  the  chance  of  sharing  its  con- 
tents, or  would  drive  the  ship  of  state  on  the  rocks  for 
the  chance  of  securing  a  part  of  the  wrecked  cargo. 
He  is  a  wrecker  and  a  speculator.  His  interests  are 
opposed  to  the  interests  of  the  toiling  masses. 

Again,  we  are  constantly  told  that  the  masses  of 
the  people  favour  "free  silver  coinage, "  or  at  least  up- 
hold the  present  silver  laws,  because  they  have  received 
the  impression,  somehow  or  other,  that  the  more  sil- 
ver there  is  coined  the  more  money  will  come  to  them. 
Let  us  look  into  that.  When  the  government  buys 
silver  Vjullion,  it  gives  its  own  notes  or  silver  dollars 
for  it.  Who  gets  these?  The  owners  of  the  silver 
bullion.     How  can  these  be  taken  from  their  pockets 


62  THE   EMPIRE   OF   BUSINESS 

and  put  into  the  pockets  of  the  people?  From  what 
we  know  of  the  silver  men,  we  cannot  expect  them  to 
present  many  of  their  dollars  to  anybody;  it  will  only 
be  when  they  buy  the  labour  or  the  products  of  the 
people  that  they  will  give  these  dollars  at  the  value  of 
a  hundred  cents  which  have  cost  them  only  seventy- 
eight.  Will  they  give  more  of  these  seventy-eight- 
cent  dollars  than  they  would  have  to  give  of  one- 
hundred-cent  dollars  for  the  same  labour  or  products  ? 
No,  not  until  or  unless  the  effort  of  the  government 
to  give  an  artificial  value  to  silver  broke  down,  and 
our  money  lost  value,  when  a  dollar  might  not  be  worth 
half  a  dollar  in  purchasing  power ;  calculated  upon  gold 
value,  they  would  always  give  less  value  than  before. 
How,  then,  can  the  working  people  or  the  farmers  be 
benefited  ?  It  is  the  owners  of  the  silver,  who  will  give 
the  government  seventy-eight  cents'  worth  of  bullion 
and  get  for  it  a  dollar,  who  will  make  the  profit.  Surely 
this  is  clear.  Up  to  this  time  the  dollar  which  the 
farmer  or  workingman  receives  is  still  worth  a  dollar 
because  the  government  has  been  able,  by  trying  hard, 
to  keep  it  worth  this ;  but  when  "  free  coinage  of  silver  " 
comes,  the  silver  dollar  must  fall  to  its  real  value— 
seventy-eight  cents — and  the  farmer  and  workingm.;  dn 
will  be  defrauded;  so  that  the  interests  of  the  fani''^^^^» 
mechanic,  labourer,  and  all  who  receive  wages  arr  ^  ^^^t 
the  "money"  they  get  should  be  of  the  higher  -"*  value, 
and  not  cheap — gold,  and  not  silver. 


THE    A    B    C    OF    MONEY  63 

Up  to  this  time  we  have  held  fast  to  gold  as  the 
standard.  Everything  in  the  United  States  is  based 
upon  gold  to-day,  all  silver  notes  or  coins  being  kept 
equal  to  gold.  Has  that  been  a  wise  or  an  unwise 
policy  ?  Would  it  now  be  best  to  let  the  gold  standard 
go,  to  which  the  advanced  nations  cling,  and  especially 
Britain,  and  adopt  the  silver  standard  of  our  South 
American  neighbours  ?  Upon  the  solid  rock  of  gold 
as  our  basis-article  we  have  built  up  the  wealthiest 
country  in  the  world,  and  the  greatest  agricultural, 
manufacturing,  and  mining  and  commercial  country 
ever  known.  We  have  prospered  beyond  any  nation 
the  sun  ever  shone  upon.  In  no  country  are  wages  of 
labour  so  high  or  the  masses  of  the  people  so  well  off. 
Shall  we  discard  the  gold  basis,  or  even  endanger  it? 
This  is  the  question  before  the  people  of  the  United 
States  to-day. 

The  New  York  Evening  Post  is  a  free-trade  organ, 
but  it  has  recently  said  that  it  would  rather  be  the 
party  to  pass  ten  McKinley  Bills  than  one  Silver  Bill 
such  as  was  urged ;  and  I,  a  Republican  and  a  believer 
in  the  wisdom  of  protection,  tell  you  that  I  would 
rather  give  up  the  McKinley  Bill  and  pass  the  Mills 
Bill,  if  for  the  exchange  I  could  have  the  present  Silver 
Bill  repealed  and  silver  treated  like  other  metals.  In 
the  next  presidential  campaign,  if  I  have  to  vote  for  a 
man  in  favour  of  silver  and  protection,  or  for  a  man  in 
favour  of  the  gold  standard  and  free  trade,  I  shall  vote 


64  THE   EMPIRE   OF   BUSINESS 

and  work  for  the  latter,  because  my  judgment  tells  me 
that  even  the  tariff  is  not  half  so  important  for  the 
good  of  the  country  as  the  maintenance  of  the  highest 
standard  for  the  money  of  the  people. 

Would  it  not  be  well  for  you  to  listen  to  men  who 
have  your  confidence,  and  who  have  been  compelled 
by  their  official  positions  to  investigate  and  study  this 
silver  question  well  ?  President  Harrison  is  well  known 
as  a  most  conscientious  man.  He  is  not  rich ;  he  is  poor. 
If  he  has  anything  at  heart,  it  is  the  good  of  the  plain 
working  people  of  his  country.  He  has  had  to  study 
this  subject,  and  he  tells  you  that  he  finds  that  the  first 
thing  a  debased  silver  dollar  will  do  is  to  go  forth  and 
cheat  some  poor  man  who  has  to  take  it  for  his  pro- 
ducts or  labour.  Ex- President  Cleveland,  like  Presi- 
dent Harrison,  is  a  poor  man ;  his  sympathies  are  with 
the  plain  working  people — the  masses.  He  had  to 
study  the  question  that  he  might  act  upon  it ;  and  al- 
though many  of  his  party  have  been  led  away  into  the 
crusade  for  silver, — temporarily,  it  is  to  be  hoped  (for 
to  its  credit,  let  me  say,  the  Democratic  party  has 
hitherto  been  the  staunch  friend  of  the  best  money  for 
the  people),  — Mr.  Cleveland  felt  that  he  must  tell  the 
truth  and  denounce  the  free-silver-coinage  idea,  be- 
cause he  found  that  it  must  injure  the  workers  of  the 
nation.  His  recent  letter  gives  another  proof  that  he 
is  a  natural  leader  of  men — a  brave  man  and  not  a 
coward.     His  personal  prospects  he  weighs  not  against 


THE    A    B    C    OF    MONEY  65 

the  true  welfare  of  the  toilers  who  once  made  him 
President.  In  addition  to  these,  no  abler,  purer,  or 
grander  Democrat  ever  managed  the  finances  of  this 
nation  than  Mr.  Manning;  no  abler,  purer,  or  grander 
Republican  ever  did  so  than  Mr.  Windom.  These 
men  were  friends  of  the  masses,  if  ever  the  masses  had 
friends.  Both  had  to  investigate  the  silver  question 
that  they  might  learn  what  was  best  and  act  so  as  to 
promote  the  permanent  welfare  of  the  people.  Both 
became  deeply  concerned  about  the  impending  danger 
of  "  debased  money, "  and  used  all  their  powers  to  stop 
representatives  in  Congress  from  forcing  the  govern- 
ment to  imperil  the  interests  of  the  workingman,  who 
must  have  the  best  money  for  his  labour  or  products, 
or  be  the  prey  of  speculators.  These  great  men,  two 
of  them  exalted  to  the  highest  political  office  upon  the 
earth  by  your  suffrages,  had  and  have  at  heart  only 
the  good'^of  the  many  as  against  the  possible  enrich- 
ment of  the  few.  Political  opponents  as  they  were  or 
are,  that  they  should  agree  upon  this  question  must 
surely  give  every  farmer,  mechanic,  and  workingman 
in  the  United  States  grave  reason  for  believing  that 
they,  and  not  the  advocates  of  silver,  are  his  wisest 
counsellors. 

1  close  with  one  word  of  advice  to  the  people.  Un- 
less the  government  ceases  to  burden  itself  month  by 
month  with  more  silver,  or  if  the  free  coinage  of  silver 
be  seriously  entertained,  avoid  silver;  when  you  lay  by 


66  THE   EMPIRE   OF    BUSINESS 

anything,  let  it  be  in  gold ;  when  you  deposit  in  the  sav- 
ings bank  let  it  be  a  gold  deposit — ask  the  bank  to  give 
you  a  gold  receipt  therefor.  There  is  no  use  in  the 
poor  taking  any  risk.  If  you  do  not  thus  act  promptly, 
you  will  find  no  gold  left  for  you.  The  speculators 
and  those  closely  identified  with  business  will  have  it 
all.  It  is  a  fact  full  of  warning  that  no  bonds  could  be 
sold  to  advantage  to-day  which  were  not  made  specially 
payable  in  gold.  There  is  danger  ahead.  Whatever 
happens,  you  can  sleep  soundly  upon  gold.  Silver 
will  bring  bad  dreams  to  wise  men.  Our  government 
can  do  much ;  it  is  very  strong ;  but  there  are  two  things 
which  it  cannot  do:  it  cannot — by  itself,  against  the 
world — permanently  give  to  silver  a  higher  value  than 
it  possesses  throughout  the  world  as  metal,  though 
this  is  what  it  is  trying  to  do ;  and  it  cannot  lessen  the 
value  of  gold.  Some  day,  perhaps,  you  may  have 
reason  to  thank  me  for  the  advice  I  have  given  you, 
although  I  hope  not. 

Do  not  think,  however,  that  I  despair  of  the  republic 
— never ;  even  if  dragged  into  the  difficulties  inseparable 
from  silver,  and  matters  become  as  bad  with  us  as  they 
are  to-day  in  the  Argentine  Republic,  where  one  gold 
dollar  is  worth  two  and  a  half  currency  dollars,  there 
is  no  occasion  to  fear  the  final  result.  The  good  sense 
of  the  people  will  restore  the  gold  basis  after  a  time, 
and  the  republic  will  march  on  to  the  front  rank  among 
nations ;  but  the  silver  experiment  will  cost  much ;  and 


THE    A    B    C    OF    MONEY  67 

it  is  better  that  the  direct  loss  should  fall  as  much  as 
possible  upon  the  few  of  the  moneyed  class  than  upon 
the  masses  of  the  people.  At  best  the  latter  must  suffer 
most,  for  moneyed  men  know  better  than  others  can 
how  to  protect  themselves.  All  this  loss,  I  am  sure, 
the  people  would  prevent  if  they  could  only  be  made 
to  understand  the  question;  for  their  interests,  far 
more  than  those  of  the  rich,  lie  with  honest  money, 
and  their  wishes  have  only  to  be  expressed  to  their 
representatives  to  prevent  the  threatened  crisis. 

Silver,  owing  to  changes  of  value,  has  become  the 
tool  of  the  speculator.  Steady,  pure,  unchangeable 
gold  has  ever  been,  and  never  was  so  much  as  now, 
the  best  instrument  for  the  protection  of  the  masses 
of  the  people. 

I  have  written  in  vain  if  this  paper  does  not  do  some- 
thing to  explain  why  this  is  so,  and  to  impel  the  peo- 
ple to  let  their  representatives  in  Congress  clearly 
understand  that,  come  what  may,  the  stamp  of  the 
republic  must  be  made  true,  the  money  of  the  Ameri- 
can people  kept  the  highest  and  surest  in  value  of  all 
money  in  the  world,  above  all  doubt  or  suspicion,  its 
standard  in  the  future,  as  in  the  past,  not  fluctuating 
Silver,  but  unchanging  Gold. 


The  Common  Interest  of  Labour 
and    Capital 

Employer  and  employe  interdependent.  The  ad- 
vantages of  mutual  trust.  The  employer  who  helps 
his  workmen  through  education,  recreation  and  social 
uplift,  helps  himself. 


THE  COMMON  INTEREST  OF  LABOUR 
AND   CAPITAL 

ADDRESS   TO   WORKINGMEN 

A  GREAT  philosopher  has  pointed  out  to  us  that  in 
this  life  the  chief,  the  highest  reward  that  we  can 
obtain,  is  the  purchase  of  satisfactions.  I  have  purchased 
a  great  satisfaction,  one  of  the  greatest  I  have  ever  ac- 
quired. I  have  been  privileged  to  help  some  of  my 
fellow-workmen  help  themselves.  This  Library  [Brad- 
dock,  Pa.]  will  give  them  an  opportunity  to  make 
themselves  more  valuable  to  their  employers,  and  so 
lay  up  intellectual  capital  that  cannot  be  impaired  or 
depreciated. 

It  is  very  unfortunate  that  the  irresistible  tend- 
ency of  our  age,  which  draws  manufacturing  into 
immense  establishments,  requiring  the  work  of  thou- 
sands of  men,  renders  it  impossible  for  employers 
who  reside  near  to  obtain  that  intimate  acquaint- 
ance with  employes  which,  under  the  old  system  of 
manufacturing  in  very  small  establishments,  made 
the  relation  of  master  and  man  more  pleasing  to  both. 

When  articles  were  manufactured  in  small  shops  by 
employers  who  required  only  the  assistance  of  a  few 

From  an  Address  to  Workmen  at  Dedication  of  Carnegie  Library, 
Braddock,  Pa.,  January,  iS.s.; 

71 


72  THE   EMPIRE   OF    BUSINESS 

men  and  apprentices,  the  employer  had  opportunities 
to  know  every  one,  to  become  well  acquainted  with 
each,  and  to  know  his  merits  both  as  a  man  and  as  a 
workman;  and  on  the  other  hand  the  workman  being 
brought  into  closer  contact  with  his  employer,  in- 
evitably knew  more  of  his  business,  of  his  cares  and 
troubles,  of  his  efforts  to  succeed,  and  more  important 
than  all,  they  came  to  know  something  of  the  charac- 
teristics  of   the   man   himself.     All   this   is   changed. 

Thus  the  employes  become  more  like  human  ma- 
chines, as  it  were,  to  the  employer,  and  the  employer 
becomes  almost  a  myth  to  his  men.  From  every 
point  of  view  this  is  a  most  regrettable  result,  yet  it  is 
one  for  which  I  see  no  remedy.  The  free  play  of 
economic  laws  is  forcing  the  manufacture  of  all  articles 
of  general  consumption  more  and  more  into  the  hands 
of  a  few  enormous  concerns,  that  their  cost  to  the  con- 
sumer may  be  less. 

There  is  no  longer  any  room  for  conducting  the 
manufacture  of  such  articles  upon  a  small  scale;  ex- 
pensive works  and  machinery  costing  millions  are 
required,  as  the  amount  per  ton  or  per  yard  of  what 
we  call  "fixed  charges"  is  so  great  a  factor  in  the  total 
cost  that  whether  a  concern  can  run  successfully 
or  not  in  many  cases  depends  upon  whether  it  divides 
these  fixed  charges — which  may  be  said  to  be  practi- 
cally the  same  in  a  large  establishment  as  in  a  smaller 
— by  a  thousand  tons  per  day  or  by  five  hundred  tons 


INTERESTS  OF   LABOUR  AND  CAPITAL    73 

per  day  of  product.  Hence  the  reason  for  the  con- 
tinual increase  year  by  year  in  the  product  of  your 
mills,  not  that  the  manufacturer  wishes  primarily  to 
increase  his  product,  but  that  the  strain  of  competi- 
tion forces  him  into  extensions  that  he  may  thereby 
reduce  more  and  more  per  ton  or  per  yard  these  fixed 
charges,  upon  which  the  safety  of  his  capital  depends. 
It  being  therefore  impossible  for  the  employers  of 
thousands  to  become  acquainted  with  their  men,  if  we 
are  not  to  lose  all  feeling  of  mutuality  between  us,  the 
employer  must  seek  their  acquaintance  through  other 
forms,  to  express  his  care  for  the  well-being  of  those 
upon  whose  labour  he  depends  for  success,  by  devoting 
part  of  his  earnings  for  institutions  like  this  library, 
and  for  the  accommodation  of  organizations  such  as 
the  co-operative  stores  which  occupy  the  lower  floor 
of  this  building,  and  I  hope  in  return  that  the  em- 
ployes are  to  show  by  the  use  which  they  make  of 
such  benefactions  that  they  in  turn  respond  to  this 
sentiment  upon  the  part  of  employers  wherever  it 
may  be  found.  By  such  means  as  these  we  may 
hope  to  maintain  to  some  extent  the  old  feeling  of 
kindliness,  mutual  confidence,  respect  and  esteem 
which  formerly  distinguished  the  relations  between 
the  employer  and  his  men.  Wc  are  younger  than 
Europe,  and  have  still  something  to  see  from  the 
older  land  in  this  respect;  but  I  rejoice  to  see  that 
many  manufacturers  in  this  country  are  awaking  to 


74  THE   EMPIRE   OF   BUSINESS 

the  sense  of  duty  to  their  employes;  and  what  is 
even  still  more  important  are  the  evidences  which  we 
find  among  our  workmen  of  a  desire  to  establish 
societies  which  cannot  but  be  beneficial  to  themselves. 
It  is  all  well  enough  for  people  to  help  others,  but  the 
grandest  result  is  achieved  when  people  prove  able 
to  help  themselves. 

Another  important  feature,  which  may  be  referred 
to,  is,  that  in  Pittsburg  labour,  generally,  is  paid  so 
well  that  the  workman  can  save  something  every 
month,  if  he  only  will  make  the  effort.  Nothing  can 
exceed  the  importance  of  saving  part  of  his  earnings. 
The  workman  who  owns  his  own  home,  has  already  a 
sure  foundation  upon  which  to  build  the  competence 
which  is  to  give  him  comfort  and  independence  in  old 
age. 

I  have  said  how  desirable  it  was  that  we  should 
endeavour,  by  every  means  in  our  power,  to  bring 
about  a  feeling  of  mutuality  and  partnership  between 
the  employer  and  the  employed.  Believe  me,  the 
interests  of  Capital  and  Labour  are  one.  He  is  an 
enemy  of  Labour  who  seeks  to  array  Labour  against 
Capital.  He  is  an  enemy  of  Capital  who  seeks  to 
array  Capital  against  Labour. 

I  have  given  the  subject  of  Labour  and  Capital 
careful  study  for  years,  and  I  wish  to  quote  a  few 
paragraphs  from  an  article  I  published  years  ago: 

"The  greatest  cause  of  the  friction  which  prevails 


INTERESTS  OF   LABOUR  AND  CAPITAL     75 

between  capital  and  labour,  the  real  essence  of  the 
trouble,  and  the  remedy  I  have  to  propose  for  this 
unfortunate  friction:" 

"The  trouble  is  that  men  are  not  paid  at  any  time 
the  compensation  proper  to  that  time.  All  large 
concerns  necessarily  keep  filled  with  orders,  say  for 
six  months  in  advance,  and  these  orders  are  taken, 
of  course,  at  prices  prevailing  when  they  are  booked. 
This  year's  operations  furnish  perhaps  the  best  illus- 
tration of  the  difficulty.  Steel  rails  at  the  end  of 
last  year  for  delivery  this  year  were  $29  per  ton  at 
the  works.  Of  course  the  mills  entered  orders  freely 
at  this  price,  and  kept  on  entering  them  until  the 
demand  growing  unexpectedly  great  carried  prices 
up  to  $35  per  ton.  Now  the  various  mills  in  America 
are  compelled  for  the  next  six  months  or  more  to  run 
upon  orders  which  do  not  average  $31  per  ton,  at 
the  seaboard  and  Pittsburg,  and  say  $34  at  Chicago. 
Transportation,  iron-stone,  and  prices  of  all  kinds 
have  advanced  upon  them  in  the  meantime,  and  they 
must  therefore  run  for  the  bulk  of  the  year  upon 
very  small  margins  of  profit.  But  the  men  noticing 
in  the  papers  the  "great  boom  in  steel  rails,"  very 
naturally  demand  their  share  of  the  advance,  and 
under  our  existing  faulty  arrangements  between  capi- 
tal and  labour  they  have  secured  it.  The  employers, 
therefore,  have  grudgingly  given  wliat  they  know 
under  proper  arrangements  they  should  not  have  been 


76  THE    EMPIRE    OF   BUSINESS 

required  to  give ;  and  there  has  been  friction  and  still 
is  dissatisfaction  upon  the  part  of  the  employers. 
Reverse  this  picture.  The  steel-rail  market  falls 
again.  The  mills  have  still  six  months'  work  at  prices 
above  the  prevailing  market,  and  can  afford  to  pay 
men  higher  wages  than  the  then  existing  state  of  the 
market  would  apparently  justify.  But  having  just 
been  amerced  in  extra  payments  for  labour  which 
they  should  not  have  paid,  they  naturally  attempt  to 
reduce  wages  as  the  market  price  of  rails  goes  down, 
and  there  arises  discontent  among  the  men,  and  we 
have  a  repetition  of  the  negotiations  and  strikes  which 
have  characterized  the  beginning  of  this  year.  In 
other  words,  when  the  employer  is  going  down  the  em- 
ploye insists  on  going  up,  and  vice  versa.  What 
we  must  seek  is  a  plan  by  which  men  will  receive 
high  wages  when  their  employers  are  receiving  high 
prices  for  the  product,  and  hence  are  making  large 
profits;  and  per  contra,  when  the  employers  are  re- 
ceiving low  prices  for  product,  and  therefore  small 
if  any  profits,  the  men  will  receive  low  wages.  If 
this  plan  can  be  foimd,  employers  and  employed  will 
be  "in  the  same  boat,"  rejoicing  together  in  their 
prosperity  and  calling  into  play  their  fortitude  to- 
gether in  adversity.  There  will  be  no  room  for  quarrels 
and  instead  of  a  feeling  of  antagonism  there  will  be  a 
feeling  of  partnership  between  employers  and  em- 
ployed.    There  is  a  simple  means  of  producing  this 


INTERESTS  OF   LABOUR  AND  CAPITAL     77 

result,  and  to  its  general  introduction  both  employers 
and  employed  should  steadily  bend  their  energies. 
Wages  should  be  based  upon  a  sliding  scale,  in  pro- 
portion to  the  net  prices  received  for  product  month 
by  month.  It  is  impossible  for  Capital  to  defraud 
Labour  under  a  sliding  scale." 

One  advantage  of  this  Library  [Carnegie  Library 
at  Braddock,  Pa.]  will  be  that  it  will  bring  before  you 
every  local  newspaper  and  every  Trade  Journal,  and 
I  beg  you  all  to  read  these  carefully.  You  will  find 
many  misstatements,  many  blimders.  These  are  in- 
separable from  the  newspaper  press,  which  must  work 
hastily  and  report  even  rumours.  But  by  studying 
the  principal  journals  the  tendency  of  affairs  can  be 
correctly  seen.  Newspapers  will  not  give  you  a  cor- 
rect statement  of  the  prices  of  material.  Manufac- 
turers are  disposed  to  give  the  brightest  colouring  to 
the  situation, — to  report  the  highest  sales  made  with 
a  view  to  maintain  prices  and  induce  customers  to 
purchase.  They  will  probably  not  report  how  low 
they  have  been  compelled  to  sell  in  order  to  meet 
competition  and  keep  works  running.  Nevertheless, 
a  careful  perusal  of  the  newspapers  and  Trade  Jour- 
nals, as  I  have  said,  will  enable  you  to  form  a  general 
opinion  of  the  trend  of  events  in  the  commercial  world. 
If  you  read  the  papers  to-day,  you  will  know  that 
out  of  thirteen  mills  engaged  in  the  manufacture  of 
steel  rails  in   this  country,   not  more  than   three  are 


78  THE   EMPIRE   OF   BUSINESS 

running  to  their  capacity.  Only  one  mill  in  all  the 
West  is  making  rails  (North  Chicago),  and  I  am  sorry 
to  say  that  it  seems  probable  that  even  that  one  will 
not  be  able  to  nm  continuously. 

The  most  melancholy  feature  in  all  the  disputes 
between  labour  and  capital  is  that  it  is  scarcely  ever 
capital  that  succeeds  in  breaking  down  the  price  of 
labour,  but,  alas,  it  is  labour  which  stabs  labour.  Look 
around  you  and  see  labour  working  for  lo,  20  and  even 
30  per  cent,  less  in  some  mills,  and  at  Johnstown 
and  Harrisburg  for  less  than  one-half  what  we  pay  for 
skilled  labour  in  this  district ;  and  then  in  your  hearts 
blame  not  capital,  but  consider  employers  who  regret 
those  reductions  in  wages,  who  stand  out  against 
them  and  run  for  years  at  higher  prices,  as  the  best 
friends  of  labour,  even  although  at  last  they  must 
frankly  confess  that  if  they  are  to  give  their  men 
steady  employment  and  save  their  capital  and  works, 
they  are  forced  to  ask  them  to  work  at  the  rates  ob- 
tained by  their  competitors.  The  first  employer  who 
reduces  labour  is  labour's  enemy ;  but  the  last  employer 
to  reduce  labour  may  be  labour's  staunchest  friend. 
The  fatal  enemy  of  labour  is  labour,  not  capital. 

The  greatest  character  in  the  public  life  of  Britain, 
and  the  staunchest  friend  of  the  Republic  in  its  hour 
of  need,  the  Radical,  John  Bright,  being  once  asked 
what  was  his  most  valuable  acquisition,  replied,  "A 
taste  for  reading."     I  can  truthfully  say  from  my 


INTERESTS  OF  LABOUR  AND  CAPITAL     79 

own  experience  that  I  agree  with  that  great  man. 
Most  anxious  to  give  you  the  best  advice  in  my  power, 
I  advise  you  to  cultivate  the  taste  for  reading.  When 
I  was  a  boy  in  my  teens  in  Allegheny  City,  Col.  Ander- 
son, whose  memory  I  must  ever  revere,  who  had  a  few 
hundred  books,  gave  notice  that  he  would  lend  these 
books  every  Saturday  afternoon  to  boys  and  young 
men.  You  cannot  imagine  with  what  anxiety  some 
of  us  who  embraced  this  opportunity  to  obtain  knowl- 
edge looked  forward  to  every  Saturday  afternoon, 
when  we  could  get  one  book  exchanged  for  another. 
The  principal  partner  with  me  in  all  our  business,  Mr. 
Phipps,  equally  with  myself,  had  obtained  access  to 
the  stores  of  knowledge  by  means  of  this  benefactor. 
It  is  from  personal  experience  that  I  feel  that  there 
is  no  human  arrangement  so  powerful  for  good,  there 
is  no  benefit  that  can  be  bestowed  upon  a  community 
so  great,  as  that  which  places  within  the  reach  of  all 
the  treasures  of  the  world  which  are  stored  up  in 
books. 

We  occasionally  find  traces  even  at  this  day  of  the 
old  prejudice  which  existed  against  educating  the 
masses  of  the  people.  I  do  not  wonder  that  this 
should  exist  when  I  reflect  upon  what  has  hitherto 
passed  for  education.  Men  have  wasted  their  precious 
years  trying  to  extract  education  from  an  ignorant 
past  whose  chief  province  is  to  teach  us,  not  what  to 
adopt,  but  what  to  avoid.     Men  have  sent  their  sons 


8o  THE   EMPIRE   OF    BUSINESS 

to  colleges  to  waste  their  energies  upon  obtaining  a 
knowledge  of  such  languages  as  Greek  and  Latin, 
which  are  of  no  more  practical  use  to  them  than 
Choctaw.  I  have  known  few  college  graduates  that 
knew  Shakespeare  or  Milton.  They  might  be  able 
to  tell  you  all  about  Ulysses  or  Agamemnon  or 
Hector,  but  what  are  these  compared  to  the  characters 
that  we  find  in  our  own  classics  ?  One  service  Russell 
Lowell  has  done,  for  which  he  should  be  thanked — he 
has  boldly  said  that  in  Shakespeare  alone  we  have  a 
greater  treasure  than  in  all  the  classics  of  ancient 
time.  They  have  been  crammed  with  the  details  of 
petty  and  insignificant  skirmishes  between  savages, 
and  taught  to  exalt  a  band  of  ruffians  into  heroes; 
and  we  have  called  them  "educated."  They  have 
been  "educated"  as  if  they  were  destined  for  life  upon 
some  other  planet  than  this.  They  have  in  no  sense 
received  instruction.  On  the  contrary,  what  they 
have  obtained  has  served  to  imbue  them  with  false 
ideas  and  to  give  them  a  distaste  for  practical  life.  I 
do  not  wonder  that  a  prejudice  has  arisen  and  still 
exists  against  such  education.  In  my  own  experi- 
ence I  can  say  that  I  have  known  few  young  men 
intended  for  business  who  were  not  injured  by  a  col- 
legiate education.  Had  they  gone  into  active  work 
during  the  years  spent  at  college  they  would  have 
been  better  educated  men  in  every  true  sense  of  that 
term.     The  fire  and  energy  have  been  stamped  out 


INTERESTS  OF   LABOUR  AND  CAPITAL     8i 

of  them,  and  how  to  so  manage  as  to  liv^e  a  life  of 
idleness  and  not  a  Hfe  of  usefulness  has  become  the 
chief  question  with  them.  But  a  new  idea  of  educa- 
tion is  now  upon  us. 

We  have  begun  to  realize  that  a  knowledge  of 
chemistry,  for  instance,  is  worth  a  knowledge  of  all 
the  dead  languages  that  ever  were  spoken  upon  the 
earth;  a  knowledge  of  mechanics  more  useful  than 
all  the  classical  learning  that  can  be  crammed  into 
young  men  at  college.  What  is  the  yoimg  man  to  do 
who  knows  Greek  with  the  young  man  that  knows 
stenography  or  telegraphy,  for  instance,  or  book- 
keeping, or  chemistry,  or  the  law  of  mechanics,  in 
these  days?  Not  that  any  kind  of  knowledge  is  to 
be  imderrated.  All  knowledge  is,  in  a  sense,  useful. 
The  point  I  wish  to  make  is  this,  that,  except  for  the 
few,  who  have  the  taste  of  the  antiquarian,  and  who 
find  that  their  work  in  life  is  to  delve  among  the  dusty 
records  of  the  past,  and  for  the  few  that  lead  profes- 
sional lives,  the  education  given  to-day  in  our  colleges 
is  a  positive  disadvantage. 

The  lack  of  education  in  its  true  sense  has  done 
more  than  all  the  other  causes  combined  to  prevent  the 
universal  recognition  of  labour.  I  remember  that 
the  great  president,  the  greatest  of  all  railway  mana- 
gers, Edgar  Thomson,  after  whom  the  works  here 
are  called,  once  asked  me  to  remove  from  Pittsburg 
to  be  master  of  machinery  of  the  Pennsylvania  Railroad. 


82  THE   EMPIRE   OF   BUSINESS 

Well,  you  may  smile.  And  I  said  to  Mr.  Thomson, 
"Why,  Mr.  Thomson,  you  amaze  me.  I  know  noth- 
ing whatever  about  machinery."  "That  is  the 
reason  I  want  you  to  take  charge  of  it,"  he  replied. 
"I  have  never  known  a  mechanic  with  judgment  and 
good  sense  except  one."  This  was  before  the  time 
of  Captain  Jones,  so  he  could  not  have  referred  to  the 
Captain.  This  lack  of  judgment  in  mechanics  was 
because  at  that  day  in  this  country  they  had  failed 
to  receive  an  all-round  education.  I  mean  the  true 
education  and  knowledge  of  matters  and  things  in 
general,  by  which  we  are  surrounded  and  with  which 
we  have  to  deal.  The  unprecedented  success  which 
has  attended  the  development  of  the  Bessemer  works 
in  this  coimtry  has  arisen  from  this  cause,  above  all 
others,  that,  unlike  the  manufacture  of  iron,  it  has 
fallen  into  the  hands  of  men  of  great  scientific  knowl- 
edge. The  services  of  these  men  are  recognized 
throughout  the  world  and  receive  compensation 
which  a  few  years  ago  would  have  been  considered 
enormous,  and  in  consequence  they  have  lifted  me- 
chanical labor  with  them  and  served  to  dignify  it  in 
the  eyes  of  the  world.  "The  mechanic,"  "the  me- 
chanical engineer,"  the  "manager  of  steel  mills," 
are  now  titles  of  honour.  If  you  want  to  make  labour 
what  it  should  be,  educate  yourself  in  useful  knowl- 
edge. That  is  the  moral  I  would  emphasize.  Get 
knowledge.     Cultivate  a  taste  for  reading,  that  you 


INTERESTS  OF   LABOUR  AND  CAPITAL     8^ 

may  know  what  the  world  has  done  and  is  doing  and 
the  drift  of  affairs. 

The  value  of  the  education  which  young  men  can 
now  receive  cannot  be  overestimated,  and  it  is  to  this 
education,  as  given  in  technical  schools,  to  which  I 
wish  to  call  your  attention.  Time  was  when  men 
had  so  little  knowledge  that  it  was  easy  for  one  man 
to  embrace  it  all,  and  the  courses  in  colleges  bear 
painful  evidence  of  this  fact  to-day.  Knowledge  is 
now  so  various,  so  extensive,  so  minute,  that  it  is  im- 
possible for  any  man  to  know  thoroughly  more  than 
one  small  branch.  This  is  the  age  of  the  speciaHst; 
therefore  you  who  have  to  make  your  living  in  this 
world  should  resolve  to  know  the  art  which  gives  you 
support;  to  know  that  thoroughly  and  well,  to  be  an 
expert  in  your  specialty.  If  you  are  a  mechanic,  then 
from  this  library  study  every  work  bearing  upon  the 
subject  of  mechanics.  If  you  are  a  chemist,  then 
ever}-  work  bearing  upon  chemistry.  If  you  are  at 
the  blast  furnaces,  then  every  work  upon  the  blast 
furnace.  If  in  the  mines,  then  every  work  upon 
mining.  Let  no  man  know  more  of  your  specialty 
than  you  do  yourself.  That  should  be  your  ideal. 
Then,  far  less  important,  but  still  important,  to  bring 
sweetness  and  Hght  into  your  life,  be  sure  to  read 
promiscuously,  and  know  a  little  about  as  many  things 
as  you  have  time  to  read  about.  Just  as  on  his  farm 
the  farniLT  must  first  attend  well  to  his  potatoes  and 


84  THE   EMPIRE   OF    BUSINESS 

his  com  and  his  wheat,  from  which  he  derives  his  reve- 
nue, and  he  may  spend  his  spare  hours  as  a  labour  of 
love  in  cultivating  the  flowers  that  surround  his  home. 
One  domain  your  work,  and  the  other  your  recreation. 

In  these  days  of  transition  and  of  struggles  between 
labour  and  capital,  to  no  better  purpose  can  you  devote 
a  few  of  your  spare  hours  than  to  the  study  of  eco- 
nomic questions.  There  are  certain  great  laws  which 
will  be  obeyed :  the  law  of  supply  and  demand ;  the  law 
of  competition;  the  law  of  wages  and  of  profits.  All 
these  you  will  find  laid  down  in  the  text-books,  and 
remember  that  there  is  no  more  possibility  of  defeat- 
ing the  operation  of  these  laws  than  there  is  of  thwart- 
ing the  laws  of  nature  which  determine  the  humidity 
of  the  atmosphere  or  the  revolution  of  the  earth  upon 
its  axis. 

The  severe  study  of  scientific  books  must  not  be 
permitted  to  exclude  the  equally  important  duty  of 
reading  the  masters  in  literature ;  and  by  all  means  of 
fiction.  The  feeling  which  prevails  in  some  quarters 
against  fiction  is,  in  my  opinion,  only  a  prejudice. 
I  know  that  some,  indeed  most,  of  the  most  eminent 
men  find  in  a  good  work  of  fiction  one  of  the  best  means 
of  enjoyment  and  of  rest.  When  exhausted  in  mind 
and  body,  and  especially  in  mind,  nothing  is  so  bene- 
ficial to  them  as  to  read  a  good  novel.  It  is  no  dis- 
paragement of  free  libraries  that  most  of  the  works 
read  are  works  of  fiction.     On   the  contrary,   it   is 


INTERESTS  OF  LABOUR  AND  CAPITAL     85 

doubtful  if  any  other  form  of  literature  would  so  well 
serve  the  important  end  of  lifting  hard-working  men 
out  of  the  prosaic  and  routine  duties  of  life.  The 
works  of  Scott,  Thackeray,  Eliot,  Dickens,  Hawthorne, 
and  others  of  the  same  class,  are  not  to  be  rated 
below  any  other  form  of  literature  for  workingmen. 

You  all  know  how  much  manufacturing  science  is 
indebted  to  the  improvements  and  inventions  which 
owe  their  first  suggestion  to  the  workman  himself. 
Now  mark  this  important  fact.  These  improvements 
and  inventions  come  from  the  educated — educated  in 
the  true  sense — and  never  from  the  ignorant  work- 
man. They  must  come,  and  they  do  come,  from  men 
who  are  in  their  special  department  men  of  more 
knowledge  than  their  fellows.  If  they  have  not  read, 
then  they  have  observed,  which  is  the  best  form  of 
education.  The  important  fact  is  that  they  must 
know;  how  the  knowledge  was  acquired,  it  matters  not. 
The  fact  that  they  know  more  about  a  problem  than 
their  fellows  and  are  able  to  suggest  the  remedy  or 
improvement,  is  what  is  of  value  to  them  and  their 
employer.  There  is  no  means  so  sure  for  enabling 
the  workman  to  rise  to  the  foremanship,  manager- 
ship and  finally  partnership  as  knowledge  of  all  that 
has  been  done  and  is  being  done  in  the  world  to-day 
in  the  special  department  in  which  he  labours.  From 
the  highest  down  to  the  lowest  a  better  grade  of  ser- 
vice is  rendered  by  the  intelligent  man  than  it  is  possi- 


86  THE    EMPIRE   OF    BUSINESS 

ble  for  the  ignorant  man  to  render.  His  knowledge 
always  comes  in,  and  whether  you  have  knowledge, 
on  the  part  of  the  manager  who  directs,  or  of  the  man 
who  only  handles  a  shovel,  you  have  in  him  a  valuable 
employe  in  proportion  to  his  knowledge,  other  things 
being  equal.  In  the  course  of  my  experience  as  a 
manufacturer  I  know  our  firm  has  made  many  mis- 
takes by  neglecting  one  simple  rule,  "never  to  under- 
take anything  new  until  your  managers  have  had  an 
opportunity  to  examine  everything  that  has  been  done 
throughout  this  world  in  that  department."  Neglect 
of  this  has  cost  us  many  hundreds  of  thousands  of 
dollars,  and  we  have  become  wise.  Now  I  say  here 
to  the  man  who  is  ambitious  to  learn,  who,  perhaps, 
thinks  that  he  has  some  improvement  in  his  mind, 
here  in  the  rooms  of  this  library,  there  is,  or  I  hope 
soon  will  be,  the  whole  world's  experience  upon  that 
subject  brought  right  before  you  down  to  a  recent  date. 
In  any  question  of  mechanics  or  any  question  of 
chemistry,  any  question  of  furnace  practice,  you  will 
find  the  records  of  the  world  at  your  disposal  here.  If 
you  are  on  the  wrong  track,  these  books  will  tell  you ; 
if  you  are  on  the  right  track,  they  will  tell  you ;  if  you 
are  on  the  right  track,  they  will  afford  you  encourage- 
ment. You  can  go  through  hall  after  hall  in  the 
patent  office  in  Washington,  and  see  thousands  of 
models  of  inventions  bearing  upon  all  branches  of 
human  industry,  and  ninety-nine  out  of  every  hundred 


INTERESTS  OF  LABOUR  AND  CAPITAL     87 

would  never  have  been  placed  there  had  the  ignorant 
inventor  had  at  command  such  faciHties  as  will  be 
yours  in  this  library. 

I  have  heard  employers  say  that  there  was  great 
danger  that  the  masses  of  the  people  might  become 
too  well  educated  to  be  content  in  their  useful  and 
necessary  occupations.  It  has  required  an  effort  upon 
my  part  to  listen  to  this  doctrine  with  patience.  It 
is  all  wrong;  I  give  it  an  unqualified  contradiction. 
The  trouble  between  capital  and  labour  is  just  in  pro- 
portion to  the  ignorance  of  the  employer  and  the 
ignorance  of  the  employed.  The  more  intelligent 
the  employer  the  better,  and  the  more  intelligent  the 
employed  the  better.  It  is  never  education,  it  is 
never  knowledge,  that  produces  collision.  It  is 
always  ignorance  on  the  part  of  one  or  the  other  of 
the  two  forces.  Speaking  from  an  experience  not 
inconsiderable,  I  make  this  statement.  Capital  is 
ignorant  of  the  necessities  and  the  just  dues  of  labour, 
and  labour  is  ignorant  of  the  necessities  and  dangers 
of  capital.  That  is  the  true  origin  of  friction  be- 
tween them.  More  knowledge  on  the  part  of  capital 
of  the  good  qualities  of  those  that  serve  it,  and  some 
knowledge  upon  the  part  of  the  men  of  the  economic 
laws  which  hold  the  capitalists  in  their  relentless 
grasp,  would  obviate  most  of  the  difficulties  which 
arise  between  these  two  forces,  which  arc  indispensa- 
bly necessary  to  each  other.     I   hope  that  those  of 


88  THE   EMPIRE   OF    BUSINESS 

our  men  who  possess  that  inestimable  prize,  the  taste 
for  reading,  will  make  it  a  point  to  study  carefully  a 
few  of  the  fundamental  laws  from  which  there  is  no 
escape,  either  on  the  part  of  capital  or  labour.  If 
this  library  be  instrumental  in  the  slightest  degree  in 
spreading  knowledge  in  this  department,  it  will  have 
justified  its  existence. 

I  trust  that  you  will  not  forget  the  importance 
of  amusements.  Life  must  not  be  taken  too  seriously. 
It  is  a  great  mistake  to  think  that  the  man  who  works 
all  the  time  wins  in  the  race.  Have  your  amusements. 
Learn  to  play  a  good  game  of  whist  or  a  good  game 
of  drafts,  or  a  good  game  of  billiards.  Become  in- 
terested in  baseball  or  cricket,  or  horses,  anything 
that  will  give  you  innocent  enjoyment  and  relieve 
you  from  the  usual  strain.  There  is  not  anything 
better  than  a  good  laugh.  I  attribute  most  of  my 
success  in  life  to  the  fact  that,  as  my  partners  often 
say,  trouble  runs  off  my  back  like  water  from  a  duck. 
There  is  a  poetical  quotation  from  Shakespeare,  that 
is  applicable.  It  is  to  "wear  your  troubles  as  your 
outsides — like  your  garments,  carelessly." 

Many  men  are  to  be  met  with  in  this  life  who  would 
have  been  great  and  successful  had  the  world  rated 
them  at  the  value  which  they  placed  upon  themselves. 
This  class  are  the  victims  of  an  hallucination.  No- 
body in  the  world  desires  to  keep  down  ability.  Every- 
body in  the  world  has  an  outstretched  hand  for  it. 


INTERESTS  OF  LABOUR  AND  CAPITAL     89 

Every  employer  of  labour  is  studying  the  young  men 
around  him,  most  anxious  to  find  one  of  exceptional 
ability.  Nothing  in  the  world  so  desirable  for  him 
and  so  profitable  for  him  as  such  a  man.  Every 
manager  in  the  works  stands  ready  to  grasp,  to  utilize 
the  man  that  can  do  something  that  is  valuable. 
Every  foreman  wants  to  have  under  him  in  his  de- 
partment able  men  upon  whom  he  can  rely  and  whose 
merits  he  obtains  credit  for,  because  the  greatest  test 
of  ability  in  a  manager  is  not  the  man  himself,  but 
the  men  with  whom  he  is  able  to  surround  himself. 
These  books  on  the  shelves  will  tell  you  the  story  of 
the  rise  of  many  men  from  our  own  ranks.  It  is  not 
the  educated,  or  so-called,  classically  educated  man, 
it  is  not  the  aristocracy,  it  is  not  the  monarchs,  that 
have  ruled  the  destinies  of  the  world,  either  in  camp, 
council,  laboratory  or  workshop.  The  great  inven- 
tions, the  improvements,  the  discoveries  in  science, 
the  great  works  in  literature  have  sprung  from  the 
ranks  of  the  poor.  You  can  scarcely  name  a  great 
invention,  or  a  great  discovery,  you  can  scarcely 
name  a  great  picture,  or  a  great  statue,  a  great  song 
or  a  great  story,  nor  anything  great  that  has  not  been 
the  product  of  men  who  started  like  yourselves  to 
earn  an  honest  living  by  honest  work. 

And,  believe  me,  the  man  whom  the  foreman  docs 
not  appreciate,  and  the  foreman  whom  the  manager 
does  not  appreciate,  and  the  manager  whom  the  firm 


90  THE    EMPIRE   OF    BUSINESS 

does  not  appreciate,  has  to  find  the  fault  not  in  the 
firm,  or  the  manager,  or  the  foreman,  but  in  himself. 
He  cannot  give  the  service  that  which  is  so  invaluable 
and  so  anxiously  looked  for.  There  is  no  man  who 
may  not  rise  to  the  highest  position,  nor  is  there  any 
man  who,  from  lack  of  the  right  qualities  or  failure  to 
exercise  them,  may  not  sink  to  the  lowest.  Employes 
have  chances  to  rise  to  higher  work,  to  rise  to  foreman, 
to  be  superintendents,  and  even  to  rise  to  be  partners, 
and  even  to  be  chairmen  in  our  service,  if  they  prove 
themselves  possessed  of  the  qualities  required.  They 
need  never  fear  being  dispensed  with.  It  is  we  who 
fear  that  the  abilities  of  such  men  may  be  lost  to  us. 

It  is  highly  gratifying  to  know  that  the  hours  of 
labour  are  being  gradually  reduced  throughout  the 
country — eight  hours  to  work,  eight  hours  to  play, 
eight  hours  to  sleep,  seems  the  ideal  division.  If  we 
could  only  establish  by  law  that  all  manufacturing 
concerns  which  run  day  and  night  should  use  three 
turns,  it  would  be  most  desirable.  You  know  we 
tried  to  do  so  for  several  years  at  a  cost  of  some  hun- 
dreds of  thousands  of  dollars,  but  were  finally  compelled 
by  our  competitors  to  give  up  the  struggle;  the  best 
plan,  perhaps,  is  to  reach  it  by  slow  degrees  through 
State  laws.  No  one  firm  can  do  much.  All  its  com- 
petitors in  the  various  states  must  be  compelled  to 
do  likewise,  for  in  our  days  profits  are  upon  so  narrow 
a  margin  that  no  firm  can  run  its  works  except  under 


INTERESTS  OF  LABOUR  AND  CAPITAL     91 

similar  conditions  with  its  competitors.  It  is  neces- 
sary, therefore,  that  laws  should  be  secured  binding 
upon  all.  We  should  be  glad  to  support  such  a  law ;  but, 
even  as  at  present, if  workmen  use  well  the  time  they  have 
at  their  disposal  they  will  soon  rise  to  higher  positions. 
You  need  not  work  twelve  hours  very  long ;  most  of 
us  have  worked  more  hours  than  twelve  in  our  youth. 

The  workman  has  many  advantages  to-day  over 
his  predecessors.  A  sliding  scale  for  his  labour  ranks 
him  higher  than  before  as  a  man  and  a  citizen.  The 
proportion  of  the  joint  earnings  of  capital  and  labour 
given  to  labour  never  was  so  great  and  is  constantly 
rising,  the  earnings  of  capital  never  were  so  low.  The 
cost  of  living  never  was  so  low  in  recent  times. 

I  hope  the  future  is  to  add  many  more  advantages  and 
that  the  toilsome  march  which  labour  has  had  to  make 
on  its  way  from  serfdom,  when  our  fore-fathers  were 
bought  and  sold  with  the  mines  and  factories  they 
worked,  up  to  its  present  condition,  is  not  yet  ended, 
but  that  it  is  destined  to  continue  and  lead  to  other  im- 
portant results  for  the  benefit  and  dignity  of  labour. 

[The  sliding  scale  proposed  was  afterwards  introduced  by  Mr. 
Carnegie  ten  years  ago  and  has  been  in  operation  ever  since.  Mr. 
Carnegie  considers  it  the  best  plan  of  all.] 


Thrift  as  a  Duty 

The  Duties  of  Rich  Men 

Thrift  an  evidence  of  civilization.  Saving  one  of  the 
highest  duties  of  citizenship.  The  accumulation  of  a 
competence  a  duty;  the  acquirement  of  vast  wealth 
not  a  virtue  but  a  great  responsibility. 


T 


THRIFT    AS    A    DUTY 

THE   DUTIES   OF   RICH   MEN 

HE  importance  of  the  subject  is  suggested  by  the 
fact  that  the  habit  of  thrift  constitutes  one  of 
the  greatest  differences  between  the  savage  and  the 
civiHzed  man.  One  of  the  fundamental  differences  be- 
tween savage  and  civilized  life  is  the  absence  of  thrift 
in  the  one  and  the  presence  of  it  in  the  other.  When 
millions  of  men  each  save  a  little  of  their  daily  earn- 
ings, these  petty  sums  combined  make  an  enormous 
amount,  which  is  called  capital,  about  which  so  much 
is  written.  If  men  consumed  each  day  of  each  week 
all  they  earned,  as  does  the  savage,  of  course  there 
would  be  no  capital — that  is,  no  savings  laid  up  for 
future  use. 

Now,  let  us  see  what  capital  does  in  the  world.  We 
will  consider  what  the  shipbuilders  do  when  they 
have  to  build  great  ships.  These  enterprising  com- 
panies offer  to  build  an  ocean  greyhoimd  for,  let  us 
say,  ;(^5oo,ooo,  to  be  paid  only  when  the  ship  is  de- 
livered after  satisfactory  trial  trips.  Where  or  how 
do  the  shipbuilders  get  this  sum  of  money  to  pay  the 
workmen,  the  wood  merchant,  the  steel  manufacturer, 
and  all  the  people  who  furnish  material  for  the  build- 

From  The  Youth's  Companion,  September,  lyoo 

95 


96  THE   EMPIRE   OF    BUSINESS 

ing  of  the  ship  ?  They  get  it  from  the  savings  of  civil- 
ized men.  It  is  part  of  the  money  saved  for  invest- 
ment by  the  milHons  of  industrious  people.  Each 
man,  by  thrift,  saves  a  little,  puts  the  money  in  a 
bank,  and  the  bank  lends  it  to  the  shipbuilders,  who 
pay  interest  for  the  use  of  it.  It  is  the  same  with  the 
building  of  a  manufactory,  a  railroad,  a  canal,  or  any- 
thing costly.  We  could  not  have  had  anything  more 
than  the  savage  had,  except  for  thrift. 

THRIFT  THE   FIRST  DUTY 

Hence,  thrift  is  mainly  at  the  bottom  of  all  im- 
provement. Without  it  no  railroads,  no  canals,  no 
ships,  no  telegraphs,  no  churches,  no  universities, 
no  schools,  no  newspapers,  nothing  great  or  costly 
could  we  have.  Man  must  exercise  thrift  and  save 
before  he  can  produce  anything  material  of  great  value. 
There  was  nothing  built,  no  great  progress  made,  as 
long  as  man  remained  a  thriftless  savage.  The  civil- 
ized man  has  no  clearer  duty  than  from  early  life  to 
keep  steadily  in  view  the  necessity  of  providing  for 
the  future  of  himself  and  those  dependent  upon  him. 
There  are  few  rules  more  salutary  than  that  which 
has  been  followed  by  most  wise  and  good  men,  namely, 
"that  expenses  should  always  be  less  than  income." 
In  other  words,  one  should  be  a  civilized  man,  saving 
something,  and  not  a  savage,  consuming  every  day 
all  that  which  he  has  earned. 


THRIFT    AS     A     DUTY  97 

The  great  poet,  Bums,  in  his  advice  to  a  young  man, 
says: 

To  catch  Dame  Fortune's  golden  smile. 

Assiduous  wait  upon  her: 
And  gather  gear  by  every  wile 

That's  justified  by  honour. 

Not  for  to  hide  it  in  a  hedge. 

Not  for  a  train  attendant ; 
But  for  the  glorious  privilege 

Of  being  independent. 

That  is  sound  advice,  so  far  as  it  goes,  and  I  hope 
the  reader  will  take  it  to  heart  and  adopt  it.  No 
proud,  self-respecting  person  can  ever  be  happy,  or 
even  satisfied,  who  has  to  be  dependent  upon  others 
for  his  necessary  wants.  He  who  is  dependent  has 
not  reached  the  full  measure  of  manhood  and  can 
hardly  be  counted  among  the  worthy  citizens  of  the 
republic.  The  safety  and  progress  of  our  country 
depend  not  upon  the  highly  educated  men,  nor  the 
few  millionnaires,  nor  upon  the  greater  number  of  the 
extreme  poor;  but  upon  the  mass  of  sober,  intelligent, 
industrious  and  saving  workers,  who  are  neither  very 
rich  nor  very  poor. 

THRIFT  DUTY  HAS  ITS  LIMIT 

As  a  rule,  you  will  find  that  the  saving  man  is  a 
temperate  man,  a  good  husband  and  father,  a  peaceful, 
law-abiding  citizen.  Nor  need  the  saving  be  great. 
It  is  surprising  how  little  it  takes  to  provide  for  the 
real  necessities  of  life.      A  little  home  paid  for  and  a 


98  THE   EMPIRE   OF    BUSINESS 

few  hundred  poiinds — a  very  few — make  all  the  dif- 
ference. These  are  more  easily  acquired  by  frugal 
people  than  you  might  suppose.  Great  wealth  is 
quite  another  and  a  far  less  desirable  matter.  It  is 
not  the  aim  of  thrift,  nor  the  duty  of  men  to  acquire 
millions.  It  is  in  no  respect  a  virtue  to  set  this  before 
us  as  an  end.  Duty  to  save  ends  when  just  money 
enough  has  been  put  aside  to  provide  comfortably 
for  those  dependent  upon  us.  Hoarding  millions  is 
avarice,  not  thrift. 

Of  course,  tmder  our  industrial  conditions,  it  is 
inevitable  that  a  few,  a  very  few  men,  will  find  money 
coming  to  them  far  beyond  their  wants.  The  ac- 
cumulation of  millions  is  usually  the  result  of  enter- 
prise and  judgment,  and  some  exceptional  ability  for 
organization.  It  does  not  come  from  savings  in  the 
ordinary  sense  of  that  word.  Men  who  in  old  age 
strive  only  to  increase  their  already  great  hoards,  are 
usually  slaves  of  the  habit  of  hoarding  formed  in  their 
youth.  At  first  they  own  the  money  they  have  made 
and  saved.  Later  in  life  the  money  owns  them,  and 
they  cannot  help  themselves,  so  overpowering  is  the 
force  of  habit,  either  for  good  or  evil.  It  is  the  abuse 
of  the  civilized  saving  instinct  and  not  its  use,  that 
produces  this  class  of  men. 

No  one  need  be  afraid  of  falling  a  vict  m  to  this  abuse 
of  the  habit  if  he  always  bears  in  mind  that  whatever 
surplus  wealth  may  come  to  him  is  to  be  regarded  as  a 


THRIFT    AS    A    DUTY  99 

sacred  trust,  which  he  is  bound  to  administer  for  the 
good  of  his  fellows.  The  man  should  always  be 
master.  He  should  keep  money  in  the  position  of  a 
useful  sen^ant.  He  must  never  let  it  master  and 
make  a  miser  of  him. 

A  man's  first  duty  is  to  make  a  competence  and  be 
independent.  But  his  whole  duty  does  not  end  here. 
It  is  his  duty  to  do  something  for  his  needy  neighbours 
who  are  less  favoured  than  himself.  It  is  his  duty  to 
contribute  to  the  general  good  of  the  community  in 
which  he  lives.  He  has  been  protected  by  its  laws. 
Because  he  has  been  protected  in  his  various  enter- 
prises he  has  been  able  to  make  money  sufficient  for 
his  needs  and  those  of  his  family.  All  beyond  this 
belongs  in  justice  to  the  protecting  power  that  has 
fostered  him  and  enabled  him  to  win  pecimiary  suc- 
cess. To  try  to  make  the  world  in  some  way  better 
than  you  found  it,  is  to  have  a  noble  motive  in  life. 
Your  surplus  wealth  should  contribute  to  the  develop- 
ment of  your  own  character  and  place  you  in  the 
ranks  of  nature's  noblemen. 

It  is  no  less  than  a  duty  for  you  to  understand  how 
important  it  is,  and  how  clear  your  duty  is,  to  form 
the  habit  of  thrift.  When  you  begin  to  earn,  always 
save  some  part  of  your  earnings,  like  a  civilized  man, 
instead  of  spending  all,  like  the  poor  savage. 


How  to  Win  Fortune 

The  advantages  of  an  early  start.  College  education 
not  necessary  to  business  success.  Poor  boys  the 
successful  men  of  to-day.  Men  of  business  ability 
sure  of  recognition. 


HOW    TO    WIN    FORTUNE 

LABOUR  is  divided  into  two  great  annies — 
the  agricultural  and  the  industrial.  In  these 
diverse  forces  are  in  operation.  In  the  former  every- 
thing tends  to  a  further  distribution  of  land  among 
the  many ;  in  the  latter  everything  tends  to  a  con- 
centration of  business  in  the  hands  of  the  few.  One 
of  the  two  great  fallacies  upon  which  "  Progress  and 
Poverty" — Mr.  George's  book — is  founded,  is  that 
the  land  is  getting  more  and  more  into  the  hands 
of  the  few.  Now  the  only  source  from  which  Mr. 
George  could  obtain  correct  information  upon  this 
point  is  the  census;  and  this  tells  us  that  in  1850  the 
average  extent  of  farms  in  the  United  States  was  203 
acres;  in  i860,  199  acres;  in  1870,  153  acres,  and  that 
in  1880  it  was  still  further  reduced  to  134  acres.  The 
reason  is  obvious  for  this  rapid  distribution  of  the 
land.  The  farmer  who  cultivates  a  small  farm  by 
his  own  labour  is  able  to  drive  out  of  the  field  the  am- 
bitious capitalist  who  attempts  to  farm  upon  a  large 
scale  with  the  labour  of  others.  In  Great  Britain 
nothing  has  been  more  significant  than  that  the  tillers 

From  The  New  York  Tribune,  April  13,  1890 

103 


I04  THE   EMPIRE   OF    BUSINESS 

of  small  farms  have  passed  through  the  agricultural 
depression  there  far  better  than  those  who  cultivated 
large  farms.  So  in  both  countries  we  have  proof 
that  under  the  free  play  of  equal  laws  land  is  becom- 
ing more  and  more  divided  among  the  masses  of  the 
people.  In  the  whole  range  of  social  questions  no 
fact  is  more  important  than  this,  and  nothing  gives 
the  thoughtful  student  greater  satisfaction.  The 
triumph  of  the  small  proprietor  over  the  large  pro- 
prietor insures  the  growth  and  maintenance  of  that 
element  in  society  upon  which  civilization  can  most 
securely  depend,  for  there  is  no  force  in  a  nation  so 
conservative  of  what  is  good,  so  fair,  so  virtuous,  as 
a  race  of  men  who  till  the  soil  they  own.  Happily 
for  mankind  experience  proves  that  man  cannot 
work  more  soil  profitably  than  he  can  till  himself 
with  the  aid  of  his  own  family. 

When  we  turn  to  the  other  army  of  labour — the 
industrial — we  are  obliged  to  confess  that  it  is  swayed 
by  the  opposite  law,  which  tends  to  concentrate  manu- 
facturing and  business  affairs  generally  in  a  few  vast 
establishments.  The  fall  in  prices  of  manufactured 
articles  has  been  startling.  Never  were  the  princi- 
pal articles  of  consumption  so  low  as  they  are  to- 
day. This  cheapening  process  is  made  possible  only 
by  concentration.  We  find  1,700  watches  per  day 
turned  out  by  one  company,  and  watches  are  sold 
for   a   few   dollars   apiece.     We   have   mills   making 


Haw    TO    WIN    FORTUNE  105 

many  thousand  yards  of  calico  per  day,  and  this 
necessary  article  is  to  be  had  for  a  few  cents  per  yard. 
Manufacturers  of  steel  make  2,500  tons  per  day,  and 
four  pounds  of  finished  steel  are  sold  for  5  cents. 
And  so  on  through  the  entire  range  of  industries. 
Divide  the  huge  factories  into  smaller  establishments, 
and  it  will  be  foimd  impossible  to  manufacture  some 
of  the  articles  at  all,  the  success  of  the  process  being 
often  dependent  on  its  being  operated  upon  a  large 
scale,  while  the  cost  of  such  articles  as  could  be  pro- 
duced in  small  establishments  would  be  two  or  three 
times  their  present  prices.  There  does  not  appear 
to  be  any  coimteracting  force  to  this  law  of  concentra- 
tion in  the  industrial  world.  On  the  contrary,  the  act- 
ive forces  at  work  seem^  to  demand  greater  and  greater 
output  or  turn-over  from  each  establishment  in  order 
that  the  minimum  of  cost  should  be  reached.  Hence 
comes  the  rapid  and  continuous  increase  of  the  capi- 
tiil  of  manufacturing  and  commercial  concerns,  five, 
ten,  fifteen,  and  even  twenty  millions  being  some- 
times massed  in  one  corporation. 

HAS  THE  YOUNG  MAN  NOW  A  CHANCE? 

This  has  given  rise  to  a  complaint  which  is  often 
heard,  but  which  I  hope  to  show  has  no  foundation. 
The  young  practical  man  points  to  these,  and  says  to 
himself:  "It  is  no  longer  possible  for  our  class 
without  capital   to   rise   beyond   the   position   of  em- 


io6  THE   EMPIRE   OF    BUSINESS 

ployes  upon  salaries.  There  is  a  lion  in  the  path 
which  leads  to  independent  commands  or  to  partner- 
ship, and  this  lion  is  the  huge  establishments  already- 
existing,  which  are  an  impassable  barrier  to  our  ad- 
vancement."  The  man  engaged  in  the  agricultural 
army,  as  we  have  seen,  has  nothing  to  fear  from  capi- 
tal. With  a  small  sum,  which  is  not  very  difficult 
for  him  to  save  or  borrow,  he  can  begin  farming,  the 
only  competition  with  which  he  has  to  contend  be- 
ing that  of  others  of  his  own  class  situated  like  him- 
self. It  is  certainly  more  difficult  for  a  mechanic  or 
practical  man  to  establish  a  new  business,  or  to  win 
partnership  in  one  that  exists,  than  it  is  for  the  young 
farmer  to  begin  his  business;  yet  the  difficulties  are 
not  insuperable,  nor  greater  than  have  hitherto  ex- 
isted. They  are  not  such  as  to  stimulate  the  ambi- 
tious; and  this  is  always  to  be  taken  into  account, 
that  if  the  race  in  the  industrial  and  business  world 
be  harder  to  win,  the  prize  is  infinitely  greater. 

Before  considering  the  prospects  of  the  mechanic 
in  the  industrial,  of  the  clerk  in  the  mercantile,  com- 
mercial and  financial  worlds,  let  me  show  that  no 
classes  other  than  these  two  have  had  much  to  do  with 
establishing  the  factories,  business  houses  and  finan- 
cial institutions  which  are  best  known  in  the  United 
States  to-day.  And  first,  as  to  the  part  of  trained 
mechanics.  I  select  the  best-known  industrial  es- 
tablishments in  each  department,  many  of  them  the 


HOW    TO    WIN    FORTUNE  107 

most  extensive  works  of  their  kind  and  of  world- 
wide reputation:  Baldwin  Works,  for  locomotives; 
Sellers  &  Co.,  Bement  &  Dougherty,  for  mechanical 
tools;  Disston's  Works,  for  saws;  works  of  the  Messrs. 
Dobson,  and  of  Thomas  Dolan,  Philadelphia,  and 
Gary,  of  Baltimore,  textile  fabrics;  Fairbanks,  for 
scales;  Studebakers,  for  waggons,  who  count  their 
waggons  by  the  acre ;  Pullman,  of  Chicago ;  Allison,  of 
Philadelphia,  for  cars;  Washburn  &  Moen,  and  Cleve- 
land Rolling  Mills,  steel  wire,  etc. ;  Bartlett,  iron 
founder,  Baltimore;  Sloanes,  also  Higgins,  carpets; 
Westinghouse,  electrical  apparatus;  Peter  Hender- 
son &  Co.,  and  Landreth  &  Co.,  seeds;  Harper  Broth- 
ers, publishers ;  Babbitt,  for  Babbitt's  metal ;  Otis 
Works,  Cleveland,  boiler  steel;  the  Remington  Works, 
and  Colt's  Works,  Hartford,  firearms;  Singer  Com- 
pany, Howe,  Grover,  sewing  machines;  McCormick 
Works,  of  Chicago;  Balls,  of  Canton,  and  Walter  A. 
Woods,  for  agricultural  implements;  steamship  build- 
ing, Roach,  Cramp,  Neafie,  on  the  Atlantic;  Scott 
upon  the  Pacific;  Parkhurst,  Wheeler,  Kirby,  McDu- 
gall,  Craig,  Coffinberry,  Wallace,  the  leading  officials  of 
shipbuilding  companies  on  our  great  lakes;  horse- 
shoes, Burdens;  Atterbury  Works,  for  glass;  Groet- 
zingers,  tanning;  Ames  Works,  for  shovels;  Stein- 
way,  Chickering  and  Knabe,  pianos. 

Every  one  of  these   great  works  was   founded   and 
managed   by   mechanics,    men   who   served   their  ap- 


io8  THE   EMPIRE    OF    BUSINESS 

prenticeship.  The  list  could  be  greatly  extended, 
and  if  we  were  to  include  those  which  were  created 
by  men  who  entered  life  as  office-boys  or  clerks,  we 
should  embrace  almost  every  famous  manufacturing 
concern  in  the  country.  Edison,  for  instance,  was 
a  telegraph  operator.  Corliss,  of  Corliss  engine ; 
Cheney,  of  Cheney  silk ;  Roebling,  of  wire  fame ; 
Spreckels,  in  sugar  refining — all  and  many  more 
captains  of  industry — were  poor  boys  with  natural 
aptitude,  to  whom  a  regular  apprenticeship  was 
scarcely  necessary. 

In  the  mercantile,  commercial  and  financial  branches 
of  business,  which  are  all  under  the  law  which  drives 
business  affairs  into  large  concerns,  the  poor  clerk 
takes  the  place  of  the  trained  mechanic  in  the  indus- 
trial world.  Claflin's,  Jaffray's,  Sloan's,  the  Lords, 
the  Taylors,  the  Phelpses,  the  Dodges,  the  gigantic 
houses  of  Jordan  &  Marsh  in  Boston,  of  Field  in  Chicago, 
Barr  in  St.  Louis,  Wanamaker  in  Philadelphia,  Mel- 
drum  &  Anderson,  Buffalo;  Newcomb,  Endicott  &  Co., 
Detroit;  Taylor,  Cleveland;  Daniels  &  Fisher, 
Denver;  Home,  and  Campbell  &  Dick,  Pittsburg,  all 
these  and  the  corresponding  houses  throughout  the 
country,  as  far  as  I  am  able  to  trace  their  history, 
have  the  same  story  to  tell.  Wanamaker,  Claflin, 
Jordan,  Lord,  Field,  Barr  and  the  others  all  poor  boys 
in  the  store,  and  Phelps  and  Dodge  both  poor  clerks. 

In  banking  and  finance,  it  is  an  oft  repeated  story 


HOW    TO    WIN    FORTUNE  109 

that  our  Stanfords,  Rockefellers,  Goulds,  Sages,  Fields, 
Dillons,  Seligmans,  Wilsons,  and  Huntingtons  came 
from  the  ranks.  The  millionnaires  who  are  in  active 
control  started  as  poor  boys,  and  were  trained  in 
that  sternest  but  most  efficient  of  all  schools — poverty. 

WHERE  IS  THE  COLLEGE-MADE  MAN? 

I  asked  a  city  banker  to  give  me  a  few  names  of 
presidents  and  vice-presidents  and  cashiers  of  our 
great  New  York  city  banks  who  had  begun  as  boys 
or  clerks.  He  sent  me  thirty-six  names,  and  wrote 
he  would  send  me  more  next  day.  I  cannot  take  the 
reader's  time  with  a  complete  list,  but  here  are  a 
few  of  the  best  known:  Williams,  president  Chemi- 
cal Bank;  Watson  &  Lang,  Bank  of  Montreal;  Tap- 
pen,  president  Gallatin  National;  Brinkerhoff,  presi- 
dent Butchers'  and  Drovers'  Bank;  Clark,  vice-presi- 
dent American  Exchange;  Jewitt,  president  Irving 
National;  Harris,  president  Nassau  Bank;  Crane, 
president  Shoe  and  Leather  Bank;  Nash,  president 
Com  Exchange  Bank;  Cannon,  president  Chase  Na- 
tional ;  Cannon,  vice-president  Fourth  National ;  Mon- 
tague, president  Second  National;  Baker,  president 
First  National;  Hamilton,  vice-president  Bowery 
Bank,  and  so  on. 

The  absence  of  the  college  graduate  in  this  list 
should  be  deeply  weighed.  I  have  inquired  and 
searched   everywhere  in  all  quarters,    but    find  small 


no  THE    EMPIRE   OF    BUSINESS 

trace  of  him  as  the  leader  in  affairs,  although  not 
seldom  occupying  positions  of  trust  in  financial 
institutions.  Nor  is  this  surprising.  The  prize-takers 
have  too  many  years  the  start  of  the  graduate ;  they 
have  entered  for  the  race  invariably  in  their  teens — 
in  the  most  valuable  of  all  the  years  for  learning — from 
fourteen  to  twenty ;  while  the  college  student  has  been 
learning  a  little  about  the  barbarous  and  petty  squab- 
bles of  a  far-distant  past,  or  trying  to  master  languages 
which  are  dead,  such  knowledge  as  seems  adapted  for 
life  upon  another  planet  than  this,  as  far  as  business 
affairs  are  concerned — the  future  captain  of  industry 
is  hotly  engaged  in  the  school  of  experience,  obtaining 
the  very  knowledge  required  for  his  future  triumphs. 

I  do  not  speak  of  the  effect  of  college  education 
upon  young  men  training  for  the  learned  professions, 
for  which  it  is,  up  to  a  certain  point,  almost  indis- 
pensable in  our  day  for  the  average  youth, 
but  the  almost  total  absence  of  the  graduate  from 
high  position  in  the  business  world  seems  to  jus- 
tify the  conclusion  that  college  education  as  it  exists 
seems  almost  fatal  to  success  in  that  domain.  It  is  to 
be  noted  that  salaried  officials  are  not  in  a  strict  sense 
in  business — a  captain  of  industry  is  one  who  makes 
his  all  in  his  business  and  depends  upon  success  for 
compensation.  It  is  in  this  field  that  the  graduate 
has  little  chance,  entering  at  twenty,  against  the 
boy  who  swept  the  office,   or  who  begins  as  ship- 


HOW    TO    WIN    FORTUNE  m 

ping  clerk  at  fourteen.  The  facts  prove  this.  There 
are  some  instances  of  the  sons  of  business  men,  grad- 
uates of  colleges,  who  address  themselves  to  a  business 
life  and  succeed  in  managing  a  business  already  created, 
but  even  these  are  few  compared  with  those  who  fail 
in  keeping  the  fortune  received. 

There  has  come,  however,  in  recent  years,  the  poly- 
technic and  scientific  school,  or  course  of  study,  for 
boys,  which  is  beginning  to  show  most  valuable  fruits 
in  the  manufacturing  branch.  The  trained  mechanic 
of  the  past,  who  has,  as  we  have  seen,  hitherto  carried 
off  most  of  the  honours  in  our  industrial  works,  is  now 
to  meet  a  rival  in  the  scientifically  educated  youth, 
who  will  push  him  hard — very  hard  indeed.  Three 
of  the  largest  steel  manufacturing  concerns  in  the 
world  are  already  under  the  management  of  three 
young  educated  men — students  of  these  schools  who 
left  theory  at  school  for  practice  in  the  works  while 
yet  in  their  teens.  Walker,  Illinois  Steel  Company, 
Chicago;  Schwab,  Edgar  Thomson  Works;  Potter, 
Homestead  Steel  Works,  Pittsburg,  are  types  of  the 
new  product — not  one  of  them  yet  thirty.  Most  of 
the  chiefs  of  departments  under  them  are  of  the  same 
class.  Such  young  educated  men  have  one  important 
advantage  over  the  apprenticed  mechanic — they  arc 
open-minded  and  without  ])reju(lico.  The  scientific 
attitude  of  mind,  that  of  the  searcher  after  truth, 
renders    them    receptive    oi    new    ideas.     Great    and 


112  THE   EMPIRE   OF    BUSINESS 

invaluable  as  the  working  mechanic  has  been,  and 
is,  and  will  always  be,  yet  he  is  disposed  to  adopt 
narrow  views  of  affairs,  for  he  is  generally  well  up 
in  years  before  he  comes  into  power.  It  is  different 
with  the  scientifically  trained  boy;  he  has  no  preju- 
dices, and  goes  in  for  the  latest  invention  or  newest 
method,  no  matter  if  another  has  discovered  it.  He 
adopts  the  plan  that  will  beat  the  record  and  discards 
his  own  devices  or  ideas,  which  the  working  mechanic 
superintendent  can  rarely  be  induced  to  do.  Let  no 
one,  therefore,  underrate  the  advantage  of  education ; 
only  it  must  be  education  adapted  to  the  end  in  view, 
and  must  give  instruction  bearing  upon  a  man's 
career  if  he  is  to  make  his  way  to  fortune. 

Thus  in  the  financial,  commercial  and  mercantile 
branches  of  business,  as  in  manufacturing,  we  have  to 
ask,  not  what  place  the  educated  mechanic  and  practical 
men  occupy,  but  what  these  two  types  have  left  for 
others  throughout  the  entire  business  world.  Very 
little,  indeed,  have  they  left. 

In  the  industrial  department  the  trained  mechanic 
is  the  founder  and  manager  of  famous  concerns.  In 
the  mercantile,  commercial  and  financial  it  is  the  poor 
office-boy  who  has  proved  to  be  the  merchant  prince 
in  disguise,  who  surely  comes  into  his  heritage.  They 
are  the  winning  classes.  It  is  the  poor  clerk  and  the 
working  mechanic  who  finally  rule  in  every  branch  of 
affairs,  without  capital,  without  family  influence,  and 


HOW    TO    WIN    FORTUNE  113 

without  college  education.  It  is  they  who  have  risen 
to  the  top  and  taken  command,  who  have  abandoned 
salaried  positions  and  boldly  risked  all  in  the  founding 
of  a  business.  College  graduates  will  usually  be  found 
under  salaries,  trusted  subordinates.  Neither  capital, 
nor  influence,  nor  college  learning,  nor  all  combined 
have  proved  able  to  contend  in  business  successfully 
against  the  energy  and  indomitable  will  which  spring 
from  all-conquering  poverty.  Lest  anything  here  said 
may  be  construed  as  tending  to  decry  or  disparage 
university  education  let  me  clearly  state  that  those 
addressed  are  the  fortunate  poor  young  men  who  have 
to  earn  a  living ;  for  such  as  can  afford  to  obtain  a 
university  degree  and  have  means  sufficient  to  insure 
a  livelihood  the  writer  is  the  last  man  to  advise  its  re- 
jection— compared  with  which  all  the  pecuniary  gains 
of  the  multi-millionnaire  are  dross — but  for  poor  youth 
the  earning  of  a  competence  is  a  duty  and  duty  done 
is  worth  even  more  than  university  education,  precious 
as  that  is.  Liberal  education  gives  a  man  who  really 
absorbs  it  higher  tastes  and  aims  than  the  acquisi- 
tion of  wealth,  and  a  world  to  enjoy,  into  which  the 
mere  millionnaire  cannot  enter ;  to  find  therefore  that 
it  is  not  the  best  training  for  business  is  to  prove  its 
claim  to  a  higher  domain.  True  education  can  be 
obtained  outside  of  the  schools;  genius  is  not 
an  indigenous  plant  in  the  groves  academic — a 
wild    flower   found    in  the    woods  all  by  itself,   need- 


114  THE    EMPIRE   OF    BUSINESS 

ing  no   care  from  society — but    average  man  needs 
imiversities. 

ARE  CORPORATIONS  TO  DISAPPEAR  ? 

The  yoimg  practical  man  of  to-day  working  at 
the  bench  or  counter,  to  whom  the  fair  goddess, 
Fortune,  has  not  yet  beckoned,  may  be  disposed  to 
conclude  that  it  is  impossible  to  start  business  in 
this  age.  There  is  something  in  that.  It  is,  no 
doubt,  infinitely  more  difficult  to  start  a  new  busi- 
ness of  any  kind  to-day  than  it  was.  But  it  is  only 
a  difference  in  form,  not  in  substance.  It  is  infi- 
nitely easier  for  a  young  practical  man  of  ability 
to  obtain  an  interest  in  existing  firms  than  it  has 
ever  been.  The  doors  have  not  closed  upon  ability; 
on  the  contrary,  they  swing  easier  upon  their  hinges. 
Capital  is  not  requisite.  Family  influence,  as  before, 
passes  for  nothing.  Real  ability,  the  capacity  for 
doing  things,  never  was  so  eagerly  searched  for  as 
now,  and  never  commanded  such  rewards. 

The  law  which  concentrates  the  leading  indus- 
tries and  commercial,  mercantile  and  financial  affairs 
in  a  few  great  factories  or  firms  contains  within  itself 
another  law  not  less  imperious.  These  vast  con- 
cerns cannot  be  successfully  conducted  by  salaried 
employes.  No  great  business  of  any  kind  can  score 
an  unusually  brilliant,  and  permanent  success  which 
is  not  in  the  hands  of  practical  men  pecuniarily  in- 


HOW    TO    WIN    FORTUNE  115 

terested  in  its  results.  In  the  industrial  world  the 
days  of  corporations  seem  likely  to  come  to  an  end. 
It  has  been  necessary  for  me  to  watch  closely  most  of 
my  life  the  operations  of  great  establishments  owned 
by  hundreds  of  absent  capitalists,  and  conducted  by 
salaried  officers.  Contrasted  with  these  I  believe  that 
the  partnership  conducted  by  men  vitally  interested 
and  owning  the  works  will  make  satisfactory  divi- 
dends when  the  corporation  is  embarrassed  and 
scarcely  knows  upon  which  side  the  balance  is  to  be 
at  the  end  of  a  year's  operations.  The  great  dry- 
goods  houses  that  interest  their  most  capable  men 
in  the  profits  of  each  department  succeed,  when  those 
fail  that  endeavor  to  work  with  salaried  men  only. 
Even  in  the  management  of  our  great  hotels,  it  is 
found  wise  to  take  into  partnership  the  principal  men. 
In  every  branch  of  business  this  law  is  at  work,  and 
concerns  are  prosperous,  generally  speaking,  just 
in  proportion  as  they  succeed  in  interesting  in  the 
profits  a  larger  and  larger  proportion  of  their  ablest 
workers.  Co-operation  in  this  form  is  fast  coming 
in  all  great  establishments.  The  manufacturing  busi- 
ness that  does  not  have  practical  manufacturing 
partners  had  better  supply  the  omission  without 
delay,  and  probably  the  very  men  required  are  the 
bright  young  mechanics  who  have  distinguished 
themselves  while  working  for  a  few  dollars  i)cr  day 
or  the  youths  from  the  polytechnic  school.     Instances 


ii6  THE    EMPIRE    OF    BUSINESS 

constantly  occur  where  the  corporation  unwilling 
to  interest  a  promising  practical  man  loses  his  services, 
and  sees  an  interest  given  him  by  some  able  individual 
manufacturer  or  commercial  firm  who  are  constantly 
on  the  lookout  for  that  indispensable  article — ability. 
It  has  not  hitherto  been  the  practice  for  corporations 
properly  to  reward  these  embryo  managers,  but  this 
they  must  come  to,  if  they  are  to  stand  the  competi- 
tion of  works  operated  by  those  interested  in  the 
profits. 

Corporations,  on  the  other  hand,  as  I  desire  to  point 
out  to  practical  young  men,  have  one  advan- 
tage. Their  shares  are  sold  freely.  If  a  worker 
wishes  to  become  interested  in  any  branch  of  man- 
ufacturing in  America  to-day,  the  path  is  easy.  For 
$50  or  $100  he  can  become  a  stockholder.  It  is  be- 
coming more  and  more  common  for  workers  so  to 
invest  their  savings.  There  are  many  well-man- 
aged corporations  whose  assets  and  prestige  enable 
them  to  earn  satisfactory  returns,  and  no  better 
evidence  of  capacity  and  of  good  judgment  can  a 
workman  give  to  his  employers  than  that  furnished 
by  the  presence  of  his  name  upon  the  books  as  a  share- 
holder in  the  concern, 

Wbrkingmen  have  a  prejudice  against  showing 
their  employers  that  the  wages  they  earn  suffice  to 
enable  them  to  save;  but  this  is  a  mistake.  The 
saving  workman  is  the  valuable  workman,  and  the 


HOW    TO    WIN    FORTUNE  117 

wise  employer  regards  the  fact  that  he  does  save 
as  prima  facie  evidence  that  there  is  something  ex- 
ceptionally valuable  in  him.  It  should  be  the  effort 
of  every  corporation  to  induce  its  principal  workers 
to  invest  their  savings  in  its  shares.  Only  in  this 
■way  can  corporations  hope  to  cope  successfully  with 
individual  manufacturers  who  have  already  discov- 
ered one  of  the  valuable  secrets  of  unusual  success, 
viz. :  to  share  their  profits  with  those  who  are  most 
instrumental  in  producing  them.  The  day  of  the 
absent  capitalist  stockholder,  who  takes  no  interest 
in  the  operation  of  the  works  beyond  the  receipt  of 
his  dividend,  is  certainly  passing  away.  The  day 
of  the  valuable  active  worker  in  the  industrial  world 
is  coming.  Let,  therefore,  no  young,  practical  work- 
man be  discouraged.  On  the  contrary,  let  him  be 
cheered.  More  and  more  it  is  becoming  easier  for  the 
mechanic  or  practical  man  of  real  ability  to  dictate 
terms  to  his  employers.  Where  there  was  one  avenue 
of  promotion,  there  are  now  a  dozen.  The  enormous 
concern  of  the  future  is  to  divide  its  profits,  not  among 
hundreds  of  idle  capitalists  who  contribute  nothing 
to  its  success,  but  among  hundreds  of  its  ablest  em- 
ployes, upon  whose  abilities  and  exertions  success 
greatly  depends.  The  capitalist  absent  stockholder 
is  to  be  replaced  by  the  able  and  present  worker. 

As  to  the  qualifications  necessary  for  the  promotion 
of   young   practical    men,  one  cannot  do  better   than 


ii8  THE    EMPIRE   OF    BUSINESS 

quote  George  Eliot,  who  put  the  matter  very  pithily : 
"I'll  tell  you  how  I  got  on.  I  kept  my  ears  and  my 
eyes  open,  and  I  made  my  master's  interest  my  own. " 

The  condition  precedent  for  promotion  is,  that  the 
man  must  first  attract  notice.  He  must  do  some- 
thing unusual,  and  especially  must  this  be  beyond 
the  strict  boundary  of  his  duties.  He  must  suggest, 
or  save,  or  perform  some  service  for  his  employer 
which  he  could  not  be  censured  for  not  having  done. 
When  he  has  thus  attracted  the  notice  of  his  imme- 
diate superior,  whether  that  be  only  the  foreman 
of  a  gang,  it  matters  not ;  the  first  great  step  has  been 
taken,  for  upon  his  immediate  superior  promotion 
depends.     How  high  he  climbs  is  his  own  affair. 

We  often  hear  men  complaining  that  they  get  no 
chance  to  show  their  ability,  and  when  they  do  show 
ability  that  it  is  not  recognized.  There  is  very  little 
in'  this.  Self-interest  compels  the  immediate  superior 
to  give  the  highest  place  under  him  to  the  man  who 
can  best  fill  it,  for  the  officer  is  credited  with  the  work 
of  his  department  as  a  whole.  No  man  can  keep  an- 
other down.  It  will  be  noticed  that  many  of  the 
practical  men  who  have  earned  fame  and  fortune  have 
done  so  through  holding  on  to  improvements  which 
they  have  made.  Improvements  are  easily  made  by 
practical  men  in  the  branch  in  which  they  are  engaged, 
for  they  have  the  most  intimate  knowledge  of  the 
problems  to  be  solved  there.     It  is  in  this  way  that 


HOW    TO    WIN    FORTUNE  119 

many  of  our  valuable  improvements  have  come.  The 
man  who  has  made  an  improvement  should  always 
have  an  eye  upon  obtaining  an  interest  in  the  business 
rather  than  an  increase  of  salary.  Even  if  the  busi- 
ness up  to  this  time  has  not  become  very  prosperous, 
if  he  has  the  proper  stuff  in  him,  he  believes  that  he 
could  make  it  so,  and  so  he  could.  All  forms  of  busi- 
ness have  their  ups  and  downs.  Seasons  of  depres- 
sion and  buoyancy  succeed  each  other,  one  year  of 
great  profits,  several  years  with  little  or  none.  This 
is  a  law  of  the  business  world,  into  the  reasons  of  which 
I  need  not  enter.  Therefore  the  able  young  practical 
man  should  not  have  much  regard  as  to  a  choice  of  the 
branch  of  business.  Any  business  properly  conducted 
will  vield  during  a  period  of  years  a  handsome  return. 

DANGERS   TO   YOUNG    MEN 

There  are  three  great  rocks  ahead  of  the  practical 
young  man  who  has  his  foot  upon  the  ladder  and  is 
beginning  to  rise.  First,  drunkenness,  which,  of 
course,  is  fatal.  There  is  no  use  in  wasting  time 
upon  any  young  man  who  drinks  liquor,  no  matter 
how  exceptional  his  talents.  Indeed,  the  greater  his 
talents  are  the  greater  the  disappointment  must  be. 
The  second  rock  ahead  is  speculation.  The  business 
of  a  speculator  and  that  of  a  manufacturer  or  man 
of  affairs,  are  not  only  clistinct  but  incompatible. 
To   be    successful    in    the   business   world,    the    inanu- 


I20  THE   EMPIRE   OF    BUSINESS 

facturer's  and  the  merchant's  profits  only  should  be 
sought.  The  manufacturer  should  go  forward  stead- 
ily, meeting  the  market  price.  When  there  are  goods 
to  sell,  sell  them;  when  supplies  are  needed,  purchase 
them,  without  regard  to  the  market  price  in  either 
case.  I  have  never  known  a  speculative  manufac- 
turer or  business  man  who  scored  a  permanent  success. 
He  is  rich  one  day,  bankrupt  the  next.  Besides  this, 
the  manufacturer  aims  to  produce  articles,  and  in  so 
doing  to  employ  labour.  This  furnishes  a  laudable 
career.  A  man  in  this  avocation  is  useful  to  his  kind. 
The  merchant  is  usefully  occupied  distributing  com- 
modities; the  banker  in  providing  capital.  The  third 
rock  is  akin  to  speculation — indorsing.  Business 
men  require  irregular  supplies  of  money,  at  some 
periods  little,  at  others  enormous  sums.  Others  be- 
ing in  the  same  condition,  there  is  strong  tempta- 
tion to  indorse  mutually.  This  rock  should  be  avoided. 
There  are  emergencies,  no  doubt,  in  which  men  should 
help  their  friends,  but  there  is  a  rule  that  will  keep  one 
safe.  No  man  should  place  his  name  upon  the  obli- 
gation of  another  if  he  has  not  sufficient  to  pay  it  with- 
out detriment  to  his  own  business.  It  is  dishonest  to 
do  so.  Men  are  trustees  for  those  who  have  trusted 
them,  and  the  creditor  is  entitled  to  all  his  capital  and 
credit.  For  one's  own  firm,  "your  name,  your  for- 
tune, and  your  sacred  honour;"  but  for  others,  no 
matter  under  what  circumstances,  only  such   aid  as 


HOW    TO    WIN    FORTUNE  121 

you  can  render  without  danger  to  your  trust.  It  is  a 
safe  rule,  therefore,  to  give  the  cash  direct  that  you 
have  to  spare  for  others  and  never  your  indorsement 
or  guarantee. 

One  great  cause  of  failure  of  young  men  in 
business  is  lack  of  concentration.  They  are  prone 
to  seek  outside  investments.  The  cause  of  many 
a  surprising  failure  lies  in  so  doing.  Every  dollar  of 
capital  and  credit,  evcrv^  business  thought,  should 
be  concentrated  upon  the  one  business  upon  which 
a  man  has  embarked.  He  should  never  scatter  his 
shot.  It  is  a  poor  business  which  will  not  yield 
better  returns  for  increased  capital  than  any  out- 
side investment.  No  man  or  set  of  men  or  corpora- 
tion can  manage  a  business  man's  capital  as  well  as 
he  can  manage  it  himself.  The  rule,  "  Do  not  put 
all  your  eggs  in  one  basket,"  does  not  apply  to  a 
man's  life  work.  Put  all  your  eggs  in  one  basket, 
and  then  watch  that  basket,  is  the  true  doctrine — 
the  most  valuable  rule  of  all.  While  business  of  all 
kinds  has  gone,  and  is  still  going  rapidly,  into  a  few 
vast  concerns,  it  is  nevertheless  demonstrated  every 
day  that  genuine  ability,  interested  in  the  profits,  is 
not  only  valuable  but  indispensable  to  their  successful 
operation.  Through  corporations  whose  shares  are 
sold  daily  upon  the  market ;  through  partnerships  that 
find  it  necessary  to  interest  their  ablest  workers; 
through  merchants  who  can  manage  their  vast  enter- 


122  THE   EMPIRE    OF   BUSINESS 

prises  successfully  only  by  interesting  exceptional 
ability ;  in  every  quarter  of  the  business  world,  avenues 
greater  in  number,  wider  in  extent,  easier  of  access 
than  ever  before  existed,  stand  open  to  the  sober,  frugal, 
energetic  and  able  mechanic,  to  the  scientifically  edu- 
cated youth,  to  the  office  boy  and  to  the  clerk — 
avenues  through  which  they  can  reap  greater  successes 
than  were  ever  before  within  the  reach  of  these  classes 
in  the  history  of  the  world. 

When,  therefore,  the  yoimg  man,  in  any  position 
or  in  any  business,  explains  and  complains  that  he 
has  not  opportunity  to  prove  his  ability  and  to  rise 
to  partnership,  the  old  answer  suffices: 

"The  fault,  dear  Brutus,  is  not  in  our  stars, 
But   in   ourselves,   that   we   are   imderlings. " 


Wealth  and  Its  Uses 


Poverty  an  incentive  to  great  achievement.  Surplus 
wealth  allows  merely  an  elaboration  of  the  simple 
needs  of  life.  Wealth  helps  consolidation  and 
cheapens  production. 


WEALTH    AND    ITS    USES 

"TT7EALTH,"  as  Mr.  Gladstone  has  recently  said, 
▼  ▼  "is  the  business  of  the  world."  That  the 
acquisition  of  money  is  the  business  of  the  world  arises 
from  the  fact  that,  with  few  unfortunate  exceptions, 
young  men  are  bom  to  poverty,  and  therefore  under 
the  salutary  operation  of  that  remarkably  wise  law 
which  makes  for  their  good:      "_Thou  shalt  earn  thy 

bread  by  the  sweat  of  thy  brow." 

It  is  the  fashion  nowadays  to  bewail  poverty  as  an 
evil,  to  pity  the  young  man  who  is  not  bom  with  a 
silver  spoon  in  his  mouth;  but  I  heartily  subscribe  to 
President  Garfield's  doctrine,  that  "The  richest  herit- 
age a  young  man  can  be  bom  to  is  poverty. "  I  make 
no  idle  prediction  when  I  say  that  is  it  from  that  class 
from  whom  the  good  and  the  great  will  spring.  It  is 
not  from  the  sons  of  the  millionnaire  or  the  noble  that 
the  world  receives  its  teachers,  its  martyrs,  its  inven- 
tors, its  statesmen,  its  poets,  or  even  its  men  of  affairs. 
It  is  from  the  cottage  of  the  poor  that  all  these  spring. 
We  can  scarcely  read  one  among  the  few  "  immortal 
names  that  were  not  bom  to  die, "  or  who  has  rendered 
exceptional  service  to  our  race,  who  had  not  the  ad- 
vantage of  being  cradled,  nursed,  and  reared  in  the 

From  a  Lecture  at  Union  College,  Schenectady,  N.  Y.,  Jan'y,  1895. 

125 


126  THE   EMPIRE   OF    BUSINESS 

stimulating  school  of  poverty.  There  is  nothing  so 
enervating,  nothing  so  deadly  in  its  effects  upon  the 
qualities  which  lead  to  the  highest  achievement, 
moral  or  intellectual,  as  hereditary  wealth.  And  if 
there  be  among  you  a  young  man  who  feels  that  he  is 
not  compelled  to  exert  himself  in  order  to  earn  and 
live  from  his  own  efforts,  I  tender  him  my  profound 
sympathy.  Should  such  an  one  prove  an  exception 
to  his  fellows,  and  become  a  citizen  living  a  life  credit- 
able to  himself  and  useful  to  the  State,  instead  of  my 
profound  sympathy  I  bow  before  him  with  profound 
reverence ;  for  one  who  overcomes  the  seductive  temp- 
tations which  surround  hereditary  wealth  is  of  the 
"  salt  of  the  earth, "  and  entitled  to  double  honour. 

One  gets  a  great  many  good  things  from  the  New 
York  Sun,  the  distinguished  proprietor  and  editor  of 
which  you  had  recently  the  pleasure,  benefit,  and 
honour  of  hearing.  I  beg  to  read  this  to  you  as  one 
of  its  nxmierous  rays  of  light : 

"Our    Boys. 

"  Every  moralist  hard  up  for  a  theme  asks  at  inter- 
vals: What  is  the  matter  with  the  sons  of  our  rich 
and  great  men?  The  question  is  followed  by 
statistics  on  the  wickedness  and  bad  endings  of  such 
sons. 

"  The  trouble  with  the  moralists  is  that  they  put  the 
question  wrong  end  first.     There  is  nothing  wrong 


WEALTH    AND    ITS    USES  127 

with  those  foolish  sons,  except  that  they  are  unlucky; 
but  there  is  something  wrong  with  their  fathers. 

"Suppose  that  a  fine  specimen  of  an  old  deerhound, 
very  successful  in  his  business,  should  collect  untold 
deer  in  the  park,  fatten  them  up,  and  then  say  to  his 
puppies:  'Here,  boys,  I've  had  a  hard  life  catching 
these  deer,  and  I  mean  to  see  you  enjoy  yourselves. 
I'm  so  used  to  racing  through  the  woods  and  hunting 
that  I  can't  get  out  of  the  habit,  but  you  boys  just  pile 
into  that  park  and  help  yourselves. '  Such  a  deer- 
hound  as  that  would  be  scorned  by  every  human 
father.  The  human  father  would  say  to  such  a  dog: 
'Mr.  Hound,  you're  simply  ruining  those  puppies. 
Too  much  meat  and  no  exercise  will  give  them  the 
mange  and  seventeen  other  troubles;  and  if  distemper 
doesn't  kill  them,  they  will  be  a  knock-kneed,  watery- 
eyed  lot  of  disgraces  to  you.  For  heaven's  sake  keep 
them  down  to  dog-biscuit  and  work  them  hard. ' 

"  That  same  human  father  does  with  great  pride  the 
very  thing  that  he  would  condemn  in  a  dog  or  a  cat. 
He  ruins  his  children,  and  then,  when  he  gets  old,  pro- 
fusely and  sadly  observes  that  he  has  done  everything 
for  them,  and  yet  they  have  disappointed  him.  He 
who  gives  to  his  son  an  office  which  he  has  not  de- 
served and  enables  him  to  disgrace  his  father  and 
friends,  deserves  no  more  sympathy  than  any  Mr. 
Fagin  deliberately  educating  a  boy  to  be  dishonest. 

"The    fat,    useless   pug-dogs   which    young   women 


128  THE   EMPIRE   OF    BUSINESS 

drag  wheezing  about  at  the  end  of  strings  are  not  to 
blame  for  their  condition,  and  the  same  thing  is  true 
of  rich  men's  sons.  The  young  women  who  overfeed 
the  dogs  and  the  fathers  who  ruin  their  sons  have 
themselves  to  thank. 

"No  man  would  advocate  the  thing,  perhaps;  but 
who  can  doubt  that  if  there  could  be  a  law  making 
it  impossible  for  a  man  to  inherit  anything  but  a  good 
education  and  a  good  constitution,  it  would  supply 
us  in  short  order  with  a  better  lot  of  men  ? " 

This  is  sound.  "  If  you  see  it  in  The  Sun  it  is  so. " 
At  least  it  is  in  this  case. 

It  is  not  the  poor  young  man  who  goes  forth  to  his 
work  in  the  morning  and  labours  until  evening  that  we 
should  pity.  It  is  the  son  of  the  rich  man  to  whom 
Providence  has  not  been  so  kind  as  to  trust  with  this 
honourable  task.  It  is  not  the  busy  man,  but  the  man 
of  idleness,  who  should  arouse  our  sympathy  and 
cause  us  sorrow.  "  Happy  is  the  man  who  has  found 
his  work, "  says  Carlyle.  I  say,  "  Happy  is  the  man  who 
has  to  work  and  to  work  hard,  and  work  long."  A 
great  poet  has  said:  "He  prayeth  best  who  loveth 
best."  Some  day  this  may  be  parodied  into:  "He 
prayeth  best  who  worketh  best."  An  honest  day's 
work  well  performed  is  not  a  bad  sort  of  prayer.  The 
cry  goes  forth  often  nowadays,  "Abolish  poverty!" 
but  fortunately  this  cannot  be  done;  and  the  poor  we 
are  always  to  have  with  us.     Abolish  poverty,  and 


WEALTH    AND    ITS    USES  129 

what  would  become  of  the  race?  Progress,  develop- 
ment, would  cease.  Consider  its  future  if  dependent 
upon  the  rich.  The  supply  of  the  good  and  the  great 
would  cease,  and  human  society  retrograde  into  bar- 
barism. Abolish  luxury,  if  you  please,  but  leave  us  the 
soil,  upon  which  alone  the  virtues  and  all  that  is  precious 
in  human  character  grow;  poverty — honest  poverty. 

I  will  assume  for  the  moment,  gentlemen,  that  you 
were  all  fortunate  enough  to  be  bom  poor.  Then  the 
first  question  that  presses  upon  you  is  this:  What 
shall  I  learn  to  do  for  the  commimity  which  will  bring 
me  in  exchange  enough  wealth  to  feed,  clothe,  lodge, 
and  keep  me  independent  of  charitable  aid  from  others  ? 
What  shall  I  do  for  a  living  ?  And  the  young  man  may 
like,  or  think  that  he  would  like,  to  do  one  thing  rather 
than  another ;  to  pursue  one  branch  or  another ;  to  be  a 
business  man  or  craftsman  of  some  kind,  or  minister, 
physician,  electrician,  architect,  editor,  or  lawyer.  I 
have  no  doubt  some  of  you  in  your  wildest  flights 
aspire  to  be  journalists.  But  it  does  not  matter 
what  the  young  man  likes  or  dislikes,  he  always  has 
to  keep  in  view  the  main  point:  Can  I  attain  such 
a  measure  of  proficiency  in  the  branch  preferred  as  will 
certainly  enable  me  to  cam  a  livelihood  by  its  practice  ? 

The  young  man,  therefore,  who  resolves  to  make 
himself  useful  to  his  kind,  and  therefore  entitled  to 
receive  in  return  from  a  grateful  community  which 
he  benefits  the  sum   necessary  for  his  support,   sees 


I30  THE   EMPIRE   OF    BUSINESS 

clearly  one  of  the  highest  duties  of  a  young  man.  He 
meets  the  vital  question  immediately  pressing  upon 
him  for  decision,  and  decides  it  rightly. 

So  far,  then,  there  is  no  difference  about  the  ac- 
quisition of  wealth.  Every  one  is  agreed  that  it  is 
the  first  duty  of  a  young  man  to  so  train  himself  as 
to  be  self-supporting.  Nor  is  there  difficulty  about 
the  next  step,  for  the  young  man  cannot  be  said  to  have 
performed  the  whole  of  his  duty  if  he  leaves  out  of 
account  the  contingencies  of  life,  liability  to  accident, 
illness,  and  trade  depressions  like  the  present.  Wis- 
dom calls  upon  him  to  have  regard  for  these  things; 
and  it  is  a  part  of  his  duty  that  he  begin  to  save  a 
portion  of  his  earnings  and  invest  them,  not  in  specu- 
lation, but  in  securities  or  in  property,  or  in  a  legiti- 
mate business  in  such  form  as  will,  perhaps,  slowly 
but  yet  surely  grow  into  the  reserve  upon  which  he 
can  fall  back  in  emergencies  or  in  old  age,  and  live 
upon  his  own  savings.  I  think  we  are  all  agreed  as 
to  the  advisability — nay,  the  duty — of  laying  up  a 
competence,  and  hence  to  retain  our  self-respect. 

Besides  this,  I  take  it  that  some  of  you  have  already 
decided,  just  as  soon  as  possible  to  ask  "a  certain 
young  lady"  to  share  his  lot,  or  perhaps  his  lots,  and, 
of  course,  he  should  have  a  lot  or  two  to  share.  Mar- 
riage is  a  very  serious  business  indeed,  and  gives  rise 
to  many  weighty  considerations.  "Be  sure  to  marry 
a  woman  with  good  common-sense,"  was  the  advice 


WEALTH    AND    ITS    USES  131 

given  me  by  my  mentor,  and  I  just  hand  it  down  to 
you.  Common  sense  is  the  most  uncommon  and 
most  valuable  quality  in  man  or  woman.  But  before 
you  have  occasion  to  provide  yourself  with  a  helpmate, 
there  comes  the  subject  upon  which  I  am  to  address 
you — "Wealth" — not  wealth  in  millions,  but  simply 
revenue  sufficient  for  modest,  independent  living. 
This  opens  up  the  entire  subject  of  wealth  in  a  greater 
or  less  degree. 

Now,  what  is  wealth?  How  is  it  created  and  dis- 
tributed ?  There  are  not  far  from  us  immense  beds  of 
coal  which  have  lain  for  millions  of  years  useless,  and 
therefore  valueless.  Through  some  experiment,  or 
perhaps  accident,  it  was  discovered  that  black  stone 
would  bum  and  give  forth  heat.  Men  sank  shafts, 
erected  machiner>%  mined  and  brought  forth  coal, 
and  sold  it  to  the  community.  It  displaced  the  use 
of  wood  as  fuel,  say  at  one-half  the  cost.  Immedi- 
ately every  bed  of  coal  became  valuable  because 
useful,  or  capable  of  being  made  so;  and  here  a  new 
article  worth  hundreds,  yes,  thousands  of  millions 
was  added  to  the  wealth  of  the  community.  A  Scotch 
mechanic  one  day,  as  the  story  goes,  gazing  into  the 
fire  upon  which  water  was  boiling  in  a  kettle,  saw  the 
steam  raise  the  lid,  as  hundreds  of  thousands  had  seen 
before  him ;  but  none  saw  in  that  sight  what  he  did — 
the  steam  engine,  which  docs  the  work  (A  the  world 
at  a  cost  so  infinitely  trifling  compared   with   what 


132  THE    EMPIRE   OF    BUSINESS 

the  plans  known  before  involved,  that  the  wealth  of 
the  world  has  been  increased  one  dares  not  estimate 
how  much.  The  saving  that  the  community  makes 
is  the  root  of  wealth  in  any  branch  of  material  de- 
velopment. Now,  a  young  man's  labour  or  service 
to  the  community  creates  wealth  just  in  proportion 
as  his  service  is  useful  to  the  community,  as  it  either 
saves  or  improves  upon  existing  methods.  Commo- 
dore Vanderbilt  saw,  I  think,  thirteen  different  short 
railway  lines  between  New  York  and  Buffalo,  involv- 
ing thirteen  different  managements,  and  a  disjointed 
and  tedious  service.  Albany,  Schenectady,  Utica, 
Syracuse,  Auburn,  Rochester,  etc.,  were  heads  of 
some  of  these  companies.  He  consolidated  them  all, 
making  one  direct  line,  over  which  your  Empire  State 
Express  flies  fifty-one  miles  an  hour,  the  fastest  time 
in  the  world;  and  a  hundred  passengers  patronize 
the  lines  where  one  did  in  olden  days.  He  rendered 
the  community  a  special  service,  which,  being  followed 
by  others,  reduces  the  cost  of  bringing  food  from  the 
prairies  of  the  West  to  your  doors  to  a  trifling  sum 
per  ton.  He  produced,  and  is  every  day  producing, 
untold  wealth  to  the  community  by  so  doing,  and 
the  profit  he  reaped  for  himself  was  but  a  drop  in  the 
bucket  compared  with  that  which  he  showered  upon 
the  State  and  the  nation. 

Now,  in  the  olden  days,  before  steam,  electricity,  or 
any  other  of  the  modem  inventions  which  unitedly 


WEALTH    AND     ITS     USES  133 

have  changed  the  whole  aspect  of  the  world,  every- 
thing was  done  upon  a  small  scale.  There  was  no 
room  for  great  ideas  to  operate  upon  a  large  scale, 
and  thus  to  produce  great  wealth  to  the  inventor, 
discoverer,  originator,  or  executive.  New  inventions 
gave  this  opportunity,  and  many  large  fortunes  were 
made  by  individuals.  But  in  our  day  we  are  rapidly 
passing,  if  we  have  not  already  passed,  this  stage  of 
development,  and  few  large  fortunes  can  now  be 
made  in  any  part  of  the  world,  except  from  one  cause, 
the  rise  in  the  value  of  real  estate.  Manufacturing, 
transportation  both  upon  the  land  and  upon  the  sea, 
banking,  insurance,  have  all  passed  into  the  hands 
of  corporations  composed  of  hundreds  and  in  many 
cases  thousands  of  shareholders.  The  New  York 
Central  Railroad  is  owned  by  more  than  ten  thousand 
shareholders,  the  Pennsylvania  Railroad  is  owned  by 
more  people  than  the  vast  army  which  it  employes, 
and  nearly  one-fourth  of  the  number  are  the  estates 
of  women  and  children.  It  is  so  with  the  great  manu- 
facturing companies;  so  with  the  great  steamship 
lines;  it  is  so,  as  you  know,  with  banks,  insurance 
companies,  and  indeed  with  all  branches  of  business. 
It  is  a  great  mistake  for  young  men  to  say  to  them- 
selves, "Oh!  we  cannot  enter  into  business."  If 
any  of  you  have  saved  as  much  as  $50  or  $100,  I  do 
not  know  any  branch  of  l)usincss  into  which  you 
cannot  j)lungc  at  once.      You  can  get  your  certificate 


134  THE   EMPIRE   OF   BUSINESS 

of  stock  and  attend  the  meeting  of  stockholders, 
make  your  speeches  and  suggestions,  quarrel  with 
the  president,  and  instruct  the  management  of  the 
affairs  of  the  company,  and  have  all  the  rights  and 
influence  of  an  owner.  You  can  buy  shares  in  any- 
thing, from  newspapers  to  tenement-houses;  but 
capital  is  so  poorly  paid  in  these  days  that  I  advise  you 
to  exercise  much  circumspection  before  you  invest. 
As  I  have  said  to  workingmen  and  to  ministers,  col- 
lege professors,  artists,  musicians,  and  physicians, 
and  all  the  professional  classes:  Do  not  invest  in 
any  business  concerns  whatever;  the  risks  of  business 
are  not  for  such  as  you.  Buy  a  home  for  yourself 
first;  and  if  you  have  any  surplus,  buy  another  lot  or 
another  house,  or  take  a  mortgage  upon  one,  or  upon 
a  railway,  and  let  it  be  a  first  mortgage,  and  be  satis- 
fied with  moderate  interest.  Do  you  know  that  out 
of  every  hundred  that  attempt  business  upon  their 
own  account  statistics  are  said  to  show  that  ninety- 
five  sooner  or  later  fail.  I  know  that  from  my  own 
experience.  I  can  quote  the  lines  of  Hudibras  and 
tell  you,  as  far  as  one  manufacturing  branch  is  con- 
cerned, that  what  he  found  to  be  true  is  still  true  to 
an    eminent   degree    to-day: 

"  Ay  me  !     What  perils  do  environ 
The  man  that  meddles  with  cold  iron." 

The  shareholders  of  iron  and  steel  concerns  to-day 
can  certify  that  this  is  so,  whether  the  iron  or  steel 


WEALTH    AND    ITS    USES  135 

be  hot  or  cold;  and  such  is  also  the  case  in  other 
branches  of  business. 

The  principal  complaint  against  our  industrial  con- 
ditions of  to-day  is  that  they  cause  great  wealth  to 
flow  into  the  hands  of  the  few.  Well,  of  the  very  few, 
indeed,  is  this  true.  It  was  formerly  so,  as  I  have 
explained,  immediately  after  the  new  inventions  had 
changed  the  conditions  of  the  world.  To-day  it  is  not 
true.  Wealth  is  being  more  and  more  distributed 
among  the  many.  The  amount  of  the  combined 
profits  of  labour  and  capital  which  goes  to  labour  was 
never  so  great  as  to-day,  the  amount  going  to  capital 
never  so  small.  While  the  earnings  of  capital  have 
fallen  more  than  one-half,  in  many  cases  have  been 
entirely  obliterated,  statistics  prove  that  the  earnings 
of  labour  were  never  so  high  as  they  were  previous  to 
the  recent  imprecedented  depression  in  business,  while 
the  cost  of  living, — the  necessaries  of  life, — have  fallen 
in  some  cases  nearly  one-half.  Great  Britain  has 
an  income  tax,  and  our  country  is  to  be  subject  to 
this  imposition  for  a  time.  The  British  returns  show 
that  during  the  eleven  years  from  1876  to  1887  the 
number  of  men  receiving  from  $750  to  $2,500  per 
year,  increased  more  than  21  per  cent.,  while  the 
number  receiving  from  $5,000  to  $25,000  actually 
decreased  2  1-2  percent. 

You  may  be  sure,  gentlemen,  that  the  question  of 
the  distribution   of   wealth   is   settling   itself   rapidly 


136  THE   EMPIRE   OF    BUSINESS 

under  present  conditions,  and  settling  itself  in  the 
right  direction.  The  few  rich  are  getting  poorer,  and 
the  toiling  masses  are  getting  richer.  Nevertheless, 
a  few  exceptional  men  may  yet  make  fortunes,  but 
these  will  be  more  moderate  than  in  the  past.  This 
may  not  be  quite  as  fortunate  for  the  masses  of  the 
people  as  is  now  believed,  because  great  accumula- 
tions of  wealth  in  the  hands  of  one  enterprising  man 
who  still  toils  on  are  sometimes  most  productive  of 
all  the  forms  of  wealth.  Take  the  richest  man  the 
world  ever  saw,  who  died  in  New  York  some  years  ago. 
What  was  found  in  his  case?  That,  with  the  excep- 
tion of  a  small  percentage  used  for  daily  expenses,  his 
entire  fortune  and  all  its  surplus  earnings  were  in- 
vested in  enterprises  which  developed  the  railway 
system  of  our  country,  which  gives  to  the  people  the 
cheapest  transportation  known.  Whether  the  mil- 
lionnaire  wishes  it  or  not,  he  cannot  evade  the  law  which 
under  present  conditions,  compels  him  to  use  his 
millions  for  the  good  of  the  people.  All  that  he  gets 
during  the  few  years  of  his  life  is  that  he  may  live  in 
a  finer  house,  surround  himself  with  finer  furniture, 
and  works  of  art  which  may  be  added:  he  could  even 
have  a  grander  library,  more  of  the  gods  around  him ; 
but,  as  far  as  I  have  known  millionnaires,  the  library 
is  the  least  used  part  of  what  he  would  probably  con- 
sider "furniture"  in  all  his  mansion.  He  can  eat 
richer  food  and  drink  richer  wines,  which  only  hurt 


WEALTH    AND    ITS    USES  137 

him.  But  truly  the  modern  millionnaire  is  generally 
a  man  of  very  simple  tastes  and  even  miserly  habits. 
He  spends  little  upon  himself,  and  is  the  toiling  bee 
laying  up  the  honey  in  the  industrial  hive,  which  all 
the  inmates  of  that  hive,  the  community  in  general, 
will  certainly  enjoy.  Here  is  the  true  description  of 
the  millionnaire,  as  given  by  Mr.  Carter  in  his  remark- 
able speech  before  the  Behring  Sea  tribunal  at  Paris : 

"Those  who  are  most  successful  in  the  acquisition 
of  property  and  who  acquire  it  to  such  an  enormous 
extent  are  the  very  men  who  are  able  to  control  it,  to 
invest  it,  and  to  handle  it  in  the  way  most  useful  to 
society.  It  is  because  they  have  those  qualities  that 
they  are  able  to  engross  it  to  so  large  an  extent.  They 
really  own,  in  any  just  sense  of  the  word,  only  what 
they  consume.  The  rest  is  all  held  for  the  benefit  of 
the  public.  They  are  the  custodians  of  it.  They 
invest  it ;  they  see  that  it  is  put  into  this  employment, 
that  employment,  another  employment.  All  labour  is 
employed  by  it  and  employed  in  the  best  manner, 
and  it  is  thus  made  the  most  productive.  These  men 
who  acquire  these  hundreds  of  millions  are  really 
groaning  under  a  servitude  to  the  rest  of  society,  for 
that  is  practically  their  condition ;  and  society  really 
endures  it  because  it  is  best  for  them  that  it  should 
be  so." 

Here  is  another  estimate  by  a  no  less  remarkable 
man.     Your  friend,   Mr.   Dana,  justly  said  at  Cornell: 


138  THE   EMPIRE   OF    BUSINESS 

"That  is  one  class  of  men  that  I  refer  to,  the  think- 
ers, the  men  of  science,  the  inventors;  and  the  other 
class  is  that  of  those  whom  God  has  endowed  with  a 
genius  for  saving,  for  getting  rich,  for  bringing  wealth 
together,  for  accumulating  and  concentrating  money, 
men  against  whom  it  is  now  fashionable  to  declaim, 
and  against  whom  legislation  is  sometimes  directed. 
And  yet  is  there  any  benefactor  of  humanity  who  is 
to  be  envied  in  his  achievements,  and  in  the  memory 
and  the  monuments  he  has  left  behind  him,  more  than 
Ezra  Cornell?  Or,  to  take  another  example  that  is 
here  before  our  eyes,  more  than  Henry  W.  Sage? 
These  are  men  who  knew  how  to  get  rich,  because  they 
had  been  endowed  with  that  faculty;  and  when  they 
got  rich,  they  knew  how  to  give  it  for  great  public 
enterprises,  for  uses  that  will  remain  Hving,  immortal 
as  long  as  man  remains  upon  the  earth.  The  men  of 
genius  and  the  men  of  money,  those  who  prepare 
new  agencies  of  life,  and  those  who  acctmiulate  and 
save  the  money  for  great  enterprises  and  great  public 
works,  these  are  the  peculiar  and  the  inestimable 
leaders  of  the  world,  as  the  twentieth  century  is  open- 
ing upon  us." 

The  bees  of  a  hive  do  not  destroy  the  honey-making 
bees,  but  the  drones.  It  will  be  a  great  mistake  for 
the  commtmity  to  shoot  the  millionnaires,  for  they  are 
the  bees  that  make  the  most  honey,  and  contribute 
most  to  the  hive  even  after  they  have  gorged  them- 


WEALTH    AND    ITS    USES  139 

selves  full.  Here  is  a  remarkable  fact,  that  the  masses 
of  the  people  in  any  country  are  prosperous  and  com- 
fortable just  in  proportion  as  there  are  millionnaires. 
Take  Russia,  \\4th  its  population  little  better  than 
serfs,  and  living  at  the  point  of  starvation  upon  the 
meanest  possible  fare,  such  fare  as  none  of  our  people 
could  or  would  eat,  and  you  do  not  find  one  millionnaire 
in  Russia,  always  excepting  the  Emperor  and  a  few 
nobles  who  own  the  land,  owing  to  their  political  sys- 
tem. It  is  the  same,  to  a  great  extent  in  Germany. 
There  are  only  two  millionnaires  known  to  me  in  the 
whole  German  Empire.  In  France,  where  the  people 
are  better  off  than  in  Germany, you  cannot  coimt  one 
half-dozen  millionnaires  in  the  whole  coimtry.  In  the 
old  home  of  our  race,  in  Britain,  which  is  the  richest 
country  in  all  Europe — the  richest  country  in  the 
world  save  one,  our  own — there  are  more  millionnaires 
than  in  the  whole  of  the  rest  of  Europe,  and  its  people 
are  better  off  than  in  any  other.  You  come  to  our 
own  land :  we  have  more  millionnaires  than  in  all  the 
rest  of  the  world  put  together,  although  we  have  not 
one  to  every  ten  that  is  reputed  so.  I  have  seen  a  list 
of  supposed  millionnaires  prepared  by  a  well-known 
lawyer  of  Brooklyn,  which  made  me  laugh,  as  it  has 
made  many  others.  I  saw  men  rated  there  as  million- 
naires who  could  not  pay  their  debts.  Many  should 
have  had  a  cipher  cut  from  their  $1,000,000.  Some 
time  ago   I   sat  next  Mr.   Evarts  at  dinner,  and  the 


I40  THE   EMPIRE   OF    BUSINESS 

conversation  touched  upon  the  idea  that  men  should 
distribute  their  wealth  during  their  lives  for  the  public 
good.  One  gentleman  said  that  was  correct,  giving 
many  reasons,  one  of  which  was  that,  of  course,  they 
could  not  take  it  with  them  at  death. 

"Well,"  said  Mr.  Evarts,  "I  do  not  know  about 
that.  My  experience  as  a  New  York  lawyer  is  that, 
somehow  or  other,  they  do  succeed  in  taking  at  least 
four-fifths  of  it."  Their  reputed  wealth  was  never 
found  at  death. 

Whatever  the  ideal  conditions  may  develop,  it 
seems  to  me  Mr.  Carter  and  Mr.  Dana  are  right.  Under 
our  present  conditions  the  millionnaire  who  toils  on  is 
the  cheapest  article  which  the  community  secures  at 
the  price  it  pays  for  him,  namely,  his  shelter,  clothing, 
and  food. 

The  inventions  of  to-day  lead  to  concentrating  in- 
dustrial and  commercial  affairs  into  huge  concerns. 
You  cannot  work  the  Bessemer  process  successfully 
without  employing  thousands  of  men  upon  one  spot. 
You  could  not  make  the  armour  for  ships  without  first 
expending  seven  millions  of  dollars,  as  the  Bethlehem 
Company  has  spent.  You  cannot  make  a  yard  of 
cotton  goods  in  competition  with  the  world  without 
having  an  immense  factory  and  thousands  of  men  and 
women  aiding  in  the  process.  The  great  electric  es- 
tablishment here  in  your  town  succeeds  because  it 
has  spent  millions,  and  is  prepared  to  do  its  work  upon 


WEALTH    AND    ITS    USES  141 

a  great  scale.  Under  such  conditions  it  is  impossible 
but  that  wealth  will  flow  into  the  hands  of  a  few  men 
in  prosperous  times  beyond  their  needs.  But  out  of 
fifty  great  fortunes  which  Mr.  Blaine  had  a  Hst  made 
of  he  found  only  one  man  who  was  reputed  to  have 
made  a  large  fortune  in  manufacturing.  These  are 
made  from  real  estate  more  than  from  all  other  causes 
combined ;  next  follows  transportation,  banking.  The 
whole  manufacturing  world  furnished  but  one  mil- 
lionnaire. 

But  assuming  that  surplus  wealth  flows  into  the 
hands  of  a  few  men,  what  is  their  duty  ?  How  is  the 
struggle  for  dollars  to  be  lifted  from  the  sordid  atmos- 
phere surrounding  business  and  made  a  noble  career? 
Now,  wealth  has  hitherto  been  distributed  in  three 
ways :  The  first  and  chief  one  is  by  willing  it  at  death 
to  the  family.  Now,  beyond  bequeathing  to  those 
dependent  upon  one  the  revenue  needful  for  modest 
and  independent  living,  is  such  a  use  of  wealth  either 
right  or  wise?  I  ask  you  to  think  over  the  result,  as 
a  rule,  of  millions  given  over  to  young  men  and  women, 
the  sons  and  daughters  of  the  millionnaire.  You  will 
find  that,  as  a  rule,  it  is  not  good  for  the  daughters; 
and  this  is  seen  in  the  character  and  conduct  of  the 
men  who  marry  them.  As  for  the  sons,  you  have 
their  condition  as  described  in  the  extract  which  I 
read  you  from  The  Sun.  Nothing  is  truer  than  this, 
that  as  a  rule  the  "almighty  dollar"  bequeathed  to 


142  THE   EMPIRE   OF    BUSINESS 

sons  or  daughters  by  millions  proves  an  almighty 
curse.  It  is  not  the  good  of  the  child  which  the  mil- 
lionnaire  parent  considers  when  he  makes  these  be- 
quests, it  is  his  own  vanity;  it  is  not  affection  for  the 
child,  it  is  self-glorification  for  the  parent  which  is  at 
the  root  of  this  injurious  disposition  of  wealth.  There 
is  only  one  thing  to  be  said  for  this  mode,  it  furnishes 
one  of  the  most  efficacious  means  of  rapid  distribution 
of  wealth  ever  known. 

There  is  a  second  use  of  wealth,  less  common  than 
the  first,  which  is  not  so  injurious  to  the  community, 
but  which  should  bring  no  credit  to  the  testator. 
Money  is  left  by  millionnaires  to  public  institutions 
when  they  must  relax  their  grasp  upon  it.  There  is 
no  grace,  and  can  be  no  blessing,  in  giving  what  cannot 
be  withheld.  It  is  no  gift,  because  it  is  not  cheerfully 
given,  but  only  granted  at  the  stem  summons  of  death. 
The  miscarriage  of  these  bequests,  the  litigation  con- 
nected with  them,  and  the  manner  in  which  they  are 
frittered  away  seem  to  prove  that  the  Fates  do  not 
regard  them  with  a  kindly  eye.  We  are  never  without 
a  lesson  that  the  only  mode  of  producing  lasting  good 
by  giving  large  sums  of  money  is  for  the  millionnaire  to 
give  as  close  attention  to  its  distribution  during  his 
life  as  he  did  to  its  acquisition.  We  have  to-day  the 
noted  case  of  five  or  six  millions  of  dollars  left  by  a 
great  lawyer  to  found  a  public  library  in  New  York, 
an  institution  needed  so  greatly  that  the  failure  of  this 


WEALTH    AND    ITS    USES  143 

bequest  is  a  misfortune.  It  is  years  since  he  died ;  the 
will  is  pronounced  invalid  through  a  flaw,  although 
there  is  no  doubt  of  the  intention  of  the  donor.  It  is 
sad  commentary  upon  the  folly  of  men  holding  the 
millions  which  they  cannot  use  until  they  are  unable 
to  put  them  to  the  end  they  desire.  Peter  Cooper, 
Pratt  of  Baltimore,  and  Pratt  of  Brooklyn,  and  others 
are  the  type  of  men  who  should  be  taken  by  you 
as  your  model ;  they  distributed  their  surplus  during 
life. 

The  third  use,  and  the  only  noble  use  of  surplus 
wealth,  is  this :  That  it  be  regarded  as  a  sacred  trust, 
to  be  administered  by  its  possessor,  into  whose  hands 
it  flows,  for  the  highest  good  of  the  people.  Man  does 
not  live  by  bread  alone,  and  five  or  ten  cents  a  day 
more  revenue  scattered  over  thousands  would  produce 
little  or  no  good.  Accumulated  into  a  great  fund  and 
expended  as  Mr.  Cooper  expended  it  for  the  Cooper 
Institute,  it  establishes  something  that  will  last  for  gen- 
erations. It  will  educate  the  brain,  the  spiritual  part 
of  man.  It  furnishes  a  ladder  upon  which  the  aspir- 
ing poor  may  climb;  and  there  is  no  use  whatever, 
gentlemen,  trying  to  help  people  who  do  not  help 
themselves.  You  cannot  push  any  one  up  a  ladder 
unless  he  be  willing  to  climb  a  little  himself.  When 
you  stop  boosting,  he  falls,  to  his  injury.  Therefore, 
I  have  often  said,  and  I  now  repeat,  that  the  day  is 
coming,  and  already  we  sec  its  dawn,  in  which  the 


144  THE    EMPIRE   OF    BUSINESS 

man  who  dies  possessed  of  millions  of  available  wealth 
which  was  free  and  in  his  hands  ready  to  be  distrib- 
uted will  die  disgraced.  Of  course  I  do  not  mean 
that  the  man  in  business  may  not  be  stricken  down 
with  his  capital  in  the  business,  which  cannot  be  with- 
drawn, for  capital  is  the  tool  with  which  he  works  his 
wonders  and  produces  more  wealth.  I  refer  to  the 
man  who  dies  possessed  of  millions  of  securities  which 
are  held  simply  for  the  interest  they  produce,  that  he 
may  add  to  his  hoard  of  miserable  dollars.  By  ad- 
ministering surplus  wealth  during  life  great  wealth 
may  become  a  blessing  to  the  community,  and  the 
occupation  of  the  business  man  accumulating  wealth 
may  be  elevated  so  as  to  rank  with  any  profession. 
In  this  way  he  may  take  rank  even  with  the  physician, 
one  of  the  highest  of  our  professions,  because  he  too, 
in  a  sense,  will  be  a  physician,  looking  after  and  trying 
not  to  cure,  but  to  prevent,  the  ills  of  humanity.  To 
those  of  you  who  are  compelled  or  who  desire  to  follow 
a  business  life  and  to  accumulate  wealth,  I  commend 
this  idea.  The  epitaph  which  every  rich  man  should 
wish  himself  justly  entitled  to  is  that  seen  upon  the 
monument  to  Pitt: 

He   lived   without   ostentation, 
And   he   died   poor. 

Such  is  the  man  whom  the  future  is  to  honour,  while 
he  who  dies  in  old  age  retired  from  business,  possessed 


WEALTH    AND    ITS    USES  145 

of  millions  of  available  wealth,  is  to  die  unwept,  un- 
honoured,  and  unsung. 

I  may  justly  divide  young  men  into  four  classes: 

First,  those  who  must  work  for  a  living,  and  set 
before  them  as  their  aim  the  acquisition  of  a  modest 
competence — of  course,  with  a  modest  but  picturesque 
cottage  in  the  country  and  one  as  a  companion  "who 
maketh  sunshine  in  a  shady  place"  and  is  the  good 
angel  of  his  life.  The  motto  of  this  class,  No.  i ,  might 
be  given  as  "Give  me  neither  poverty  nor  riches." 
' '  From  the  anxieties  of  poverty  as  from  the  responsi- 
bilities of  wealth,  good  Lord,  deliver  us." 

Class  No.  2,  comprising  those  among  you  who  are 
determined  to  acquire  wealth,  whose  aim  in  life  is  to 
belong  to  that  much-talked-of  and  grandly  abused 
class,  the  millionaires,  those  who  start  to  labour  for 
the  greatest  good  of  the  greatest  number,  but  the 
greatest  number  always  number  one,  the  motto  of 
this  class  being  short  and  to  the  point:  "Put  money 
in  thy  purse. 

Now,  the  third  class  comes  along.  The  god  they 
worship  is  neither  wealth  nor  happiness.  They  are 
inflamed  with  "noble  ambition;"  the  desire  of  fame  is 
the  controlling  element  of  their  lives.  Now,  while  this 
is  not  so  ignoble  as  the  desire  for  material  wealth,  it 
must  be  said  that  it  betrays  more  vanity.  The  shrine 
of  fame  has  many  worshippers.  The  element  of 
vanity  is  seen  in  its  fiercest  i)hase  among  those  who 


146  THE   EMPIRE   OF    BUSINESS 

come  before  the  public.  It  is  well  known,  for  instance, 
that  musicians,  actors,  and  even  painters — all  the 
artistic  class — are  peculiarly  prone  to  excessive  per- 
sonal vanity.  This  has  often  been  wondered  at;  but 
the  reason  probably  is  that  the  musician  and  the  actor, 
and  even  the  painter,  may  be  transcendent  in  his 
special  line  without  being  even  highly  educated,  with- 
out having  an  all-around  brain.  Some  peculiarities, 
some  one  element  in  his  character,  may  give  him 
prominence  or  fame,  so  that  his  love  of  art,  or  of  use 
through  art,  is  entirely  drowned  by  a  narrow,  selfish, 
personal  vanity.  But  we  find  this  liability  in  a  lesser 
degree  all  through  the  professions,  the  politician,  the 
lawyer,  and,  with  reverence  be  it  spoken,  sometimes 
the  minister ;  less,  I  think,  in  the  physician  than  in  any 
of  the  professions,  probably  because  he,  more  than  in 
any  other  profession,  is  called  to  deal  with  the  sad 
realities  of  life  face  to  face.  He  of  all  men  sees  the 
vanity  of  vanities.  An  illustration  of  this  class  is  well 
drawn  in  Hotspur's  address: 

By  heavens,  methinks  it  were  an  easy  leap, 
To  pluck  bright  honour  from  the  pale-faced  moon; 
Or  dive  into  the  bottom  of  the  deep, 
Where  fathom-line  could  never  touch  the  ground. 
And  pluck  up  drowned  honour  by  the  locks; 
So  he  that  doth  redeem  her  thence  might  wear 
Without  corrival  all  her  dignities. 

Mark,  young  gentlemen,  he  cares  not  for  use;  he 
cares  not  for  state ;  he  cares  only  for  himself,  and,  as  a 
vain  peacock,  struts  across  the  stage. 


WEALTH    AND    ITS    USES  147 

Now,  gentlemen,  it  does  not  seem  to  me  that  the 
love  of  wealth  is  the  controlling  desire  of  so  many  as 
the  love  of  fame;  and  this  is  matter  for  sincere  con- 
gratulation, and  proves  that  under  the  irresistible  laws 
of  evolution  the  race  is  slowly  moving  onward  and  up- 
ward. Take  the  whole  range  of  the  artistic  world, 
which  gives  sweetness  and  light  to  life,  which  refines 
and  adorns,  and  surely  the  great  composer,  painter, 
pianist,  lawyer,  judge,  statesman,  all  those  in  public 
life,  care  less  for  millions  than  for  professional  reputa- 
tion in  their  respective  fields  of  labour.  What  cared 
Washington,  Franklin,  Lincoln,  or  Grant  and  Sherman 
for  wealth  ?  Nothing !  What  cared  Harrison  or 
Cleveland,  two  poor  men,  not  unworthy  successors? 
What  care  the  Judges  of  our  Supreme  Court,  or  even 
the  leading  counsel  that  plead  before  them  ?  ■  The 
great  preachers,  physicians,  great  teachers,  are  not  con- 
cerned about  the  acquisition  of  wealth.  The  treasure 
they  seek  is  in  the  reputation  acquired  through  their 
service  to  others,  and  this  is  certainly  a  great  step 
from  the  millionnaire  class,  who  struggle  to  old  age,  and 
through  old  age  to  the  verge  of  the  grave,  with  no 
ambition,  apparently,  except  to  add  to  their  pile  of 
miserable  dollars. 

But  there  is  a  fourth  class,  higher  than  all  the  pre- 
ceding, who  worship  neither  at  the  shrine  of  wealth 
nor  fame,  but  at  the  noblest  of  all  shrines,  the  shrine 
of  service — service  to  the  race.     Self-abnegation  is  its 


148  THE   EMPIRE   OF   BUSINESS 

watchword.  Members  of  this  inner  and  higher  circle 
seek  not  popular  applause,  are  concerned  not  with 
being  popular,  but  with  being  right.  They  say  with 
Confucius:  "It  concemeth  me  not  that  I  have  not 
high  office ;  what  concerns  me  is  to  make  myself  worthy 
of  office."  It  is  not  cast  down  by  poverty,  neither 
imduly  elated  by  prosperity.  The  man  belonging  to 
this  class  simply  seeks  to  do  his  duty  day  by  day  in 
such  manner  as  may  enable  him  to  honour  himself, 
fearing  nothing  but  his  own  self-reproach.  I  have 
known  men  and  women  not  prominently  before  the 
public,  for  this  class  courts  not  prominence,  but  who 
in  their  lives  proved  themselves  to  have  reached  this 
ideal  stage.  Now,  I  will  give  you  for  this  class  the 
fitting  illustration  from  the  words  of  a  Scotch  poet 
who  died  altogether  too  young: 

I  will  go  forth  'mong  men,  not  mailed  in  scorn. 
But  in  the  armour  of  a  pure  intent. 
Great  duties  are  before  me,  and  great  songs; 
And  whether  crowned  or  crownless  when  I  fall, 
It  matters  not,  so  as  God's  work  is  done. 
I've  learned  to  prize  the  quiet  lightning  deed, 
Not  the  applauding  thunder  at  its  heels 
Which  men  call  fame. 

Then,  gentlemen,  standing  upon  the  threshold  of 
life,  you  have  the  good,  better,  best  presented  to  you — 
the  three  stages  of  development,  the  natural,  spiritual, 
and  celestial,  they  may  fitly  be  called.  One  has  suc- 
cess in  material  things  for  its  aim — not  without  benefit 


WEALTH    AND    ITS    USES  149 

this  for  the  race  as  a  whole,  because  it  Hfts  the  indi- 
vidual from  the  animal  and  demands  the  exercise  of 
many  valuable  qualities:  sobriety,  industry,  and  self- 
discipline.  The  second  rises  still  higher:  the  reward 
sought  for  being  things  more  of  the  spirit — not  gross  and 
material,  but  invisible ;  and  not  of  the  flesh,  but  of  the 
brain,  the  spiritual  part  of  man ;  and  this  brings  into  play 
innumerable  virtues  which  make  good  and  useful  men. 

The  third  or  celestial  class  stands  upon  an  entirely 
different  footing  from  the  others  in  this,  that  selfish 
considerations  are  subordinated  in  the  select  brother- 
hood of  the  best,  the  service  to  be  done  for  others  being 
the  first  consideration.  The  reward  of  either  wealth  or 
fame  is  unsought,  for  these  have  learned  and  know  full 
well  that  virtue  is  its  own  and  the  only  exceeding  great 
reward ;  and  this  once  enjoyed,  all  other  rewards  are 
not  worth  seeking.  And  so  wealth  and  even  fame 
are  dethroned ;  and  there  stands  enthroned  the  highest 
standard  of  all — your  own  approval  flowing  from  a 
faithful  discharge  of  duty  as  you  see  it,  fearing  no 
consequences,  seeking  no  reward. 

It  does  not  matter  much  what  branch  of  effort  your 
tastes  or  judgment  draw  you  to,  the  one  great  point 
is  that  you  should  be  drawn  to  some  one  branch. 
Then  perform  your  whole  duty  in  it  and  a  little  more — 
the  "little  more"  being  vastly  important.  We  have 
the  words  of  a  great  poet  for  it,  that  the  man  who  does 
the  best  he  can,  can  whiles  do  more.     Maintain  your 


I50  THE   EMPIRE   OF   BUSINESS 

self-respect  as  the  most  precious  jewel  of  all  and  the 
only  true  way  to  win  the  respect  of  others,  and  then 
remember  what  Emerson  says,  for  what  he  says  here 
is  true:  "No  young  man  can  be  cheated  out  of  an 
honourable  career  in  life  unless  he  cheat  himself." 


The  Bugaboo  of  Trusts 

What  is  a  Trust  ?  Combinations  the  order  of  the  day. 
Trusts  that  increase  production  and  reduce  prices. 


THE    BUGABOO    OF    TRUSTS 

WE  must  all  have  our  toys ;  the  child  his  rattle, 
the  adult  his  hobby,  the  man  of  pleasure  the 
fashion,  the  man  of  art  his  Master;  and  mankind 
in  its  various  divisions  requires  a  change  of  toys  at 
short  intervals.  The  same  rule  holds  good  in  the 
business  world.  We  have  had  our  age  of  "consolida- 
tions" and  "watered  stocks."  Not  long  ago  every- 
thing was  a  "syndicate;"  the  word  is  already  becom- 
ing obsolete  and  the  fashion  is  for  "Trusts,"  which 
will  in  turn  no  doubt  give  place  to  some  new  panacea, 
that  is  in  turn  to  be  displaced  by  another,  and  so  on 
without  end.  The  great  laws  of  the  economic  world, 
like  all  laws  affecting  society,  being  the  genuine  out- 
growth of  human  nature,  alone  remain  unchanged 
through  all  these  changes.  Whenever  consolidations 
or  watered  stocks,  or  syndicates,  or  Trusts  endeavor 
to  circumvent  these,  it  always  has  been  found  that 
after  the  collision  there  is  nothing  left  of  the  panaceas, 
while  the  great  laws  continue  to  grind  out  their  irre- 
sistible consequences  as  before. 

It  is  worth  while  to  inquire  into  the  appearance 
and  growth  of  Trusts  and  learn  what  environments 
produce  them.     Their  genesis  is  as  follows:  a  demand 

From  The  North  American  Review,  February,  1889 


154  THE   EMPIRE   OF   BUSINESS 

exists  for  a  certain  article,  beyond  the  capacity  of 
existing  works  to  supply  it.  Prices  are  high,  and 
profits  tempting.  Every  manufacturer  of  that  article 
immediately  proceeds  to  enlarge  his  works  and  in- 
crease their  producing  power.  In  addition  to  this 
the  unusual  profits  attract  the  attention  of  his  princi- 
pal managers  or  those  who  are  interested  to  a  greater 
or  less  degree  in  the  factory.  These  communicate 
the  knowledge  of  the  prosperity  of  the  works  to  others. 
New  partnerships  are  formed,  and  new  works  are 
erected,  and  before  long  the  demand  for  the  article 
is  fully  satisfied,  and  prices  do  not  advance.  In  a 
short  time  the  supply  becomes  greater  than  the  de- 
mand, there  are  a  few  tons  or  yards  more  in  the  market 
for  sale  than  required,  and  prices  begin  to  fall.  They 
continue  falling  until  the  article  is  sold  at  cost  to  the 
less  favourably  situated  or  less  ably  managed  factory ; 
and  even  until  the  best  managed  and  best  equipped 
factory  is  not  able  to  produce  the  article  at  the  prices 
at  which  it  can  be  sold.  Political  economy  says  that 
here  the  trouble  will  end.  Goods  will  not  be  pro- 
duced at  less  than  cost.  This  was  true  when  Adam 
Smith  wrote,  but  it  is  not  quite  true  to-day.  When 
an  article  was  produced  by  a  small  manufacturer, 
employing,  probably  at  his  own  home,  two  or  three 
journeymen  and  an  apprentice  or  two,  it  was  an  easy 
matter  for  him  to  limit  or  even  to  stop  production. 
As  manufacturing  is  carried  on  to-day,  in  enormous 


I 


THE     BUGABOO     OF     TRUSTS  155 

establishments  with  five  or  ten  millions  of  dollars  of 
capital  invested,  and  with  thousands  of  workers,  it 
costs  the  manufacturer  much  less  to  run  at  a  loss  per 
ton  or  per  yard  than  to  check  his  production.  Stop- 
page would  be  serious  indeed.  The  condition  of  cheap 
manufacture  is  running  full.  Twenty  sources  of  ex- 
pense are  fixed  charges,  many  of  which  stoppage  would 
only  increase.  Therefore  the  article  is  produced  for 
months,  and  in  some  cases  that  I  have  known  for 
years,  not  only  without  profit  or  without  interest 
upon  capital,  but  to  the  impairment  of  the  capital 
invested.  Alanufacturers  have  balanced  their  books 
year  after  year  only  to  find  their  capital  reduced  at 
each  successive  balance.  While  continuing  to  pro- 
duce may  be  costly,  the  manufacturer  knows  too  well 
that  stoppage  would  be  ruin.  His  brother  manu- 
facturers are  of  course  in  the  same  situation.  They 
see  the  savings  of  many  years,  as  well  perhaps  as  the 
capital  they  have  succeeded  in  borrowing,  becoming 
less  and  less,  with  no  hope  of  a  change  in  the  situation. 
It  is  in  soil  thus  prepared  that  anything  promising 
relief  is  gladly  welcomed.  The  manufacturers  are 
in  the  position  of  patients  that  have  tried  in  vain 
every  doctor  of  the  regular  school  for  years,  and  are 
now  liable  to  become  the  victims  of  any  quack  that 
appears.  Combinations  —  syndicates  —  Trusts  —  they 
are  willing  to  try  anything.  A  meeting  is  called,  and 
in  the  presence  of  immediate  danger  they  decide  to 


156  THE   EMPIRE   OF    BUSINESS 

take  united  action  and  form  a  Trust.  Each  factory- 
is  rated  as  worth  a  certain  amount.  Officers  are 
chosen,  and  through  these  the  entire  product  of  the 
article  in  question  is  to  be  distributed  to  the  pubHc, 
at  remunerative  prices. 

Such  is  the  genesis  of  "Trusts"  in  manufactured 
articles.  In  transportation  the  situation,  while  prac- 
tically the  same,  differs  in  some  particulars.  Many 
small  railways  lines  are  built  under  separate  charters. 
A  genius  in  affairs  sees  that  the  eight  or  ten  separate 
organizations,  with  as  many  different  ideas  of  man- 
agement, equipment,  etc.,  are  as  useless  as  were  the 
two  hundred  and  fifty  petty  kings  in  Germany,  and, 
Bismarck-like,  he  sweeps  them  out  of  existence,  creates 
a  great  through  line,  doubles  the  securities  or  stock, 
the  interest  upon  which  is  paid  out  of  the  saving  ef- 
fected by  consolidation,  and  all  is  highly  satisfactory, 
as  in  the  case  of  the  New  York  Central.  Or  a  line  is 
built  and  managed  with  such  sagacity  as  distinguishes 
the  Pennsylvania  Railroad,  and  it  succeeds  in  devel- 
oping the  resources  of  the  State  so  extensively  that 
upon  a  line  of  three  hundred  and  fifty  miles  between 
Pittsburg  and  Philadelphia  it  nets  about  thirteen 
milUons  of  dollars  per  annum.  Twelve  millions  of 
dollars  of  this  it  shows  upon  its  books.  From  one  to 
two  millions  extra  are  expended  in  making  one  of  the 
best  lines  in  the  world  out  of  a  road  which  was  origin- 
ally designed  as  a  horse-railroad.     We  do  not  call  our 


THE     BUGABOO     OF     TRUSTS  157 

railroad  combinations  Trusts,  but  they  are  substan- 
tially such,  since  they  aim  at  raising  and  maintaining 
transportation  rates  in  certain  districts.  They  are 
"combinations"  or  "systems"  which  aim  at  monopo- 
lies within  these  districts. 

During  the  recent  Presidential  campaign  it  suited 
the  purpose  of  one  of  the  parties  to  connect  Trusts 
with  the  doctrine  of  protection.  But  Trusts  are  con- 
fined to  no  country,  and  are  not  in  any  way  dependent 
upon  fiscal  regulations.  The  greatest  Trust  of  all 
just  now  is  the  Copper  Trust,  which  is  French,  and 
has  its  headquarters  in  Paris.  The  Salt  Trust  is 
English,  with  its  headquarters  in  London.  The  Wire- 
rod  Trust  is  German.  The  only  Steel-rail  Trust  that 
e\"er  existed  was  an  international  one  which  embraced 
all  the  works  in  Europe.  Trusts,  either  in  transporta- 
tion or  manufactures,  are  the  products  of  human 
weakness,  and  this  weakness  is  co-extensive  with  the 
race. 

There  is  one  huge  combination  classed  with  Trusts 
which  is  so  exceptional  in  its  origin  and  history  that  it 
deserves  a  separate  paragraph.  I  refer  to  the  Standard 
Oil  Company.  So  favourable  an  opportunity  to  con- 
trol a  product  perhaps  never  arose  as  in  the  case  of 
petroleum.  At  an  early  stage  a  few  of  the  ablest 
business  men  that  the  world  has  ever  seen  realized 
the  importance  of  the  discovery,  and  invested  largely 
in  the  purchase  of  property  connected  with   it.     The 


158  THE   EMPIRE   OF    BUSINESS 

success  of  the  petroleum  business  was  phenomenal, 
and  so  was  the  success  of  these  people.  The  profits 
they  made,  and,  no  doubt,  as  much  capital  as  they 
could  borrow,  were  fearlessly  reinvested,  and  they  soon 
became  the  principal  owners,  and  finally,  substantially 
the  only  owners  of  the  territory  which  contained  this 
great  source  of  wealth.  The  Standard  Oil  Company 
would  long  ago  have  gone  to  pieces  had  it  not  been 
managed,  upon  the  whole,  in  harmony  with  the  laws 
which  control  business.  It  is  generally  admitted  that 
the  prices  of  oil  to  the  consumer  are  as  low  to-day, 
and  many  think  that  they  are  even  lower,  than  could 
have  been  attained  had  the  business  not  been  grouped 
and  managed  as  one  vast  concern  in  the  broad  spirit 
for  which  the  Standard  Oil  managers  are  famous. 
They  are  in  the  position  somewhat  of  the  Colemans, 
of  Pennsylvania,  who  possess  the  chief  source  of  the 
ore  supply  in  the  East.  They  own  the  Cornwall  de- 
posit of  ore  as  the  Standard  Oil  Company  owns  the 
source  of  the  oil  deposit.  But  as  the  company  has 
continually  to  deal  with  the  finding  of  oil  in  other 
localities,  the  price  of  its  existence  and  success  is  the 
continuance  of  that  exceptional  ability  in  its  councils 
and  management  displayed  by  its  founders.  Threat- 
ened opposition  arises  every  now  and  then,  and  the 
chances  are  greatly  in  favor  of  the  Standard  Oil  Com- 
pany losing  its  practical  monopoly,  and  going  the  way 
of   all  huge   combinations.     It  is  a  hundred  to  one 


THE     BUGABOO     OF     TRUSTS  159 

whether  it  will  survive  when  the  present  men  at  the 
head  retire ;  or  perhaps  I  should  say  when  the  present 
man  retires,  for  wonderful  organizations  imply  a  genius 
at  the  head,  a  commander-in-chief,  with  exceptionally 
able  corps  commanders  no  doubt,  but  still  a  Grant  at 
the  head.  To  those  who  quote  the  Standard  Oil 
Company  as  an  evidence  that  Trusts  or  combinations 
can  be  permanently  successful,  I  say,  wait  and  see. 
I  have  spoken  thus  freely  of  that  company,  because  I 
am  ignorant  of  its  management,  profits,  and  modes  of 
action.  I  view  it  from  the  outside,  as  a  student  of 
political  economy  only,  and  as  such  have  endeavoured 
to  apply  to  it  the  principles  which  I  know  will  have 
their  way,  no  matter  how  formidable  the  attempt 
made  to  defeat  their  operations. 

We  have  given  the  genesis  of  Trusts  and  combina- 
tions in  their  several  forms.  The  question  is.  Do  they 
menace  the  permanent  interest  of  the  nation?  Are 
they  a  source  of  serious  danger  ?  Or  are  they  to  prove, 
as  many  other  similar  forms  have  proved,  mere  passing 
phases  of  unrest  and  transition?  To  answer  this 
question  let  us  follow  the  operation  of  the  manufac- 
turing Trust  which  we  have  in  imagination  created, 
salt  or  sugar,  nails,  beans,  or  lead  or  copper;  it  is  all 
the  same.  The  sugar  refiners,  let  us  say,  have  formed 
a  Trust  after  competing  one  with  another  through 
years  of  disastrous  business,  and  all  the  sugar  manu- 
factured  in  the  country  in  existing  factories  is  sold 


i6o  THE    EMPIRE   OF    BUSINESS 

through  one  channel  at  advanced  prices.  Profits  be- 
gin to  grow.  Dividends  are  paid,  and  those  who  be- 
fore saw  their  property  vanishing  before  their  eyes 
are  now  made  happy.  The  dividends  from  that  part 
of  a  man's  capital  invested  in  the  sugar  business  yield 
him  profit  far  above  the  capital  he  has  invested  in 
various  other  affairs.  The  prices  of  sugar  are  such 
that  the  capital  invested  in  a  new  factory  would  yield 
enormously.  He  is  perhaps  bound  not  to  enlarge  his 
factory  or  to  enter  into  a  new  factory,  but  his  relatives 
and  acquaintances  soon  discover  the  fresh  opportu- 
nity for  gain.  He  can  advise  them  to  push  the  com- 
pletion of  a  small  factory,  which,  of  course,  must  be 
taken  into  the  Trust.  Or,  even  if  he  does  not  give 
his  friends  this  intimation,  capital  is  always  upon  the 
alert,  especially  when  it  is  bruited  about  that  a  Trust 
has  been  formed,  as  in  the  case  of  sugar,  and  imme- 
diately new  sugar  manufactories  spring  up,  as  if  by 
magic.  The  more  successful  the  Trust,  the  surer 
these  off -shoots  are  to  sprout.  Every  victory  is  a 
defeat.  Every  factory  that  the  Trust  buys  is  the 
sure  creator  of  another,  and  so  on  ad  infinitum,  until 
the  bubble  bursts.  The  sugar  refiners  have  tried  to 
get  more  from  capital  in  a  special  case  than  capital 
yields  in  general.  They  have  endeavoured  to  raise  a 
part  of  the  ocean  of  capital  above  the  level  of  the  sur- 
rounding waters,  and  over  their  bulwarks  the  floods 
have  burst,  and  capital,  like  water,  has  again  found 


THE     BUGABOO     OF     TRUSTS  i6i 

its  level.  It  is  true  that  to  regain  this  level  a  longer 
or  a  shorter  period  may  be  required,  during  which  the 
article  affected  may  be  sold  to  the  consumer  in  limited 
quantities  at  a  higher  rate  than  before  existed.  But 
for  this  the  consumer  is  amply  recompensed  in  the 
years  that  follow,  during  which  the  struggle  between 
the  discordant  and  competitive  factories  becomes 
severer  than  it  ever  was  before,  and  lasts  till  the  great 
law  of  the  survival  of  the  fittest  vindicates  itself. 
Those  factories  and  managers  that  can  produce  to  the 
best  advantage  eventually  close  the  less  competent. 
Capital  wisely  managed  yields  its  legitimate  profit. 
After  a  time  the  growth  of  demand  enables  capital  to 
receive  an  unusual  profit.  This  in  turn  attracts  fresh 
capital  to  the  manufacture,  and  we  have  a  renewal  of 
the  old  struggle,  the  consumer  reaping  the  benefit. 

Such  is  the  law,  such  has  been  the  law,  and  such 
promises  to  be  the  law  for  the  future;  for,  so  far,  no 
device  has  yet  been  devised  that  has  permanently 
thwarted  its  operation.  Given  freedom  of  competi- 
tion, and  all  combinations  or  trusts  that  attempt  to 
exact  from  the  consumer  more  than  a  legitimate  re- 
turn upon  capital  and  services,  write  the  charter  of 
their  own  defeat.  We  have  many  proofs  that  this 
great  law  does  not  sleep,  and  that  it  will  not  be  sup- 
pressed. Some  time  ago,  as  I  have  stated,  the  steel 
rail  manufacturers  of  Europe  formed  a  trust  and  ad- 
vanced the  price  of  rails  to  such  an  extent  that  Ameri- 


i62  THE   EMPIRE   OF    BUSINESS 

can  manufacturers  were  able  for  the  first,  and  per- 
haps for  the  last  time,  to  export  steel  rails  to  Canada 
in  competition  with  the  European.  But  the  mis- 
understandings and  quarrels,  inseparable  from  these 
attempted  unions  of  competitors,  soon  broke  the 
Trust.  With  vindictive  feelings,  added  to  what  was 
before  business  rivalry,  the  struggle  was  renewed, 
and  the  steel  rail  industry  of  Europe  has  never  re- 
covered. It  was  found  that  the  advance  in  prices  had 
only  galvanized  into  life  concerns  which  never  should 
have  attempted  to  manufacture  rails;  and  so  that 
Trust  died  a  natural  death. 

During  the  great  depression  which  existed  for  sev- 
eral years  in  this  country  in  the  steel  rail  trade  many 
anxious  "meetings  were  held  under  circumstances 
described  in  the  genesis  of  Trusts,  and  it  was  resolved 
that  the  plan  of  restricting  production  should  be  tried. 
Fortunately  reaction  soon  came.  A  demand  for  rails 
set  in  before  the  plan  went  into  operation,  and,  as  a 
matter  of  fact,  no  restriction  of  product  was  ever 
attempted,  and  the  steel  rail  industry  was  thus  saved 
from  a  great  error. 

We  have  recently  seen  the  lead  industry  of  this 
country  shattered  and  its  chief  owners  bankrupted. 
The  newspapers  a  few  weeks  ago  were  filled  with  ac- 
counts of  the  convention  of  the  growers  of  cattle  in 
St.  Louis,  resolved  to  break  down  the  combination  of 
slaughterers   and    shippers   in    Chicago    and    Kansas 


THE     BUGABOO     OF     TRUSTS  163 

City.  No  business  was  poorer  in  this  country  for 
many  years  than  the  manufacture  of  nails.  It  was 
overdone.  To  remedy  this  the  manufacturers  did  not 
form  a  Trust  so  far  as  the  sale  of  product  was  con- 
cerned, but  they  restricted  production.  A  certain 
percentage  of  their  machines  was  kept  idle.  This 
percentage  was  increased  from  time  to  time,  and  only 
the  quantity  made  that  the  market  would  take  at  a 
certain  price.  But  the  result  was  that  there  were 
soon  more  machines  in  America  for  the  manufacture 
of  iron  nails  added  to  the  works  than  the  demand  for 
nails  will  require  for  many  years  to  come,  and  this 
combination  of  nail  manufacturers  went  the  way  of 
all  Trusts,  and  left  the  business  in  a  worse  plight  than 
it  was  before. 

The  Sugar  Trust  has  already  a  noted  competitor 
at  its  heels.  The  Copper  Trust  is  in  danger.  All 
stand  prepared  to  attack  a  "Trust"  or  "combine" 
if  it  proves  itself  worth  attacking;  in  other  words, 
if  it  succeeds  in  raising  its  profits  above  the  natural 
level  of  profits  throughout  the  country  it  is  subject 
to  competition  from  every  quarter,  and  must  finally 
break  down.  It  is  unnecessary  to  devote  much  at- 
tention to  the  numerous  Trusts  in  minor  articles 
which  one  reads  of,  a  new  one  appearing  every  few 
days  and  others  passing  out  of  existence,  because  they 
are  all  subject  to  the  great  law.  The  newspapers 
charge  that  Trusts  exist  or  have  existed  in  wall  paper, 


1 64  THE   EMPIRE   OF   BUSINESS 

shoe  laces,  lumber,  coal,  coke,  brick,  screws,  rope, 
glass,  school-books,  insurance  and  hardware,  and 
twenty  more  articles ;  but  the  fitting  epitaph  for  these 
ephemeral  creations  is 

"If  I  was  so  soon  to  be  done  for, 
I  wonder  what  I  was  begun  for ! " 

We  may  exclaim  with  Macbeth,  as  he  watched  the 
shadowy  descendants  of  Banquo  filing  past,  "What, 
will  the  line  stretch  out  to  the  crack  of  doom?"  But 
as  with  Banquo's  procession,  so  with  Trusts,  it  is 
comforting  to  remember  that  as  one  approaches  an- 
other disappears.  They  come  like  shadows,  and  so 
depart. 

So  much  for  Trusts  in  the  manufacturing  depart- 
ment. Let  us  now  examine  the  railways,  whose 
"pools"  and  "combinations"  and  "differentials" 
alarm  some  people.  In  all  their  various  forms,  these 
are  the  efforts  of  capital  to  protect  itself  from  the  play 
of  economic  forces,  centred  in  free  competition.  In 
most  cases  the  stocks  of  railways  have  been  watered. 
Calculated  upon  the  real  capital  invested  the  divi- 
dends of  railway  lines  have  been  unusual,  and  much 
above  the  return  which  capital  generally  has  yielded 
in  other  forms  of  investment.  The  entire  capital 
stock  of  railways  in  the  West  as  a  rule  has  cost  little 
or  nothing,  the  proceeds  of  the  bonds  issued  having 
been  sufficient  to  build  them.  The  efforts  of  railway 
managers  to-day  are  therefore  directed  to  obtain  a 


THE     BUGABOO     OF     TRUSTS  165 

return  upon  more  capital  than  would  be  required  to 
duplicate  their  respective  properties.  Their  combi- 
nations and  agreements  of  various  kinds,  which  come 
to  naught  a  few  months  after  they  are  solemnly  en- 
tered into,  are  evidences  of  this  attempt.  But,  just 
as  enormous  profits  on  capital,  received  from  the 
manufacture  of  any  article,  are  sure  to  attract  addi- 
tional capital  into  the  production  of  the  article,  so, 
in  like  manner,  the  unusual  success  of  these  railroads 
attracts  new  capital  into  their  territory.  New  York 
Central  paying  dividends  upon  its  eighty  per  cent, 
stock  dividend  culminates  in  the  West  Shore.  The 
Pennsylvania  Railroad,  earning,  as  I  have  said,  some- 
thing like  thirteen  millions  per  annum  upon  its  line 
in  Pennsylvania,  has  its  South  Pennsylvania.  One 
line  between  Chicago  and  Milwaukee  being  greatly 
profitable,  fortunately  brought  into  existence  a  parallel 
road.  The  two  being  unusually  profitable,  fortunately 
resulted  in  a  third.  There  was  one  line  between  these 
points,  and  now  there  are  six;  and  should  the  six 
combine  to-morrow  and  exact  from  the  public  one 
per  cent,  more  return  upon  capital  than  the  average 
return,  there  would  soon  be  seven,  and  very  prop- 
erly so. 

This  proves  once  more  that  there  is  no  possibility 
of  evading  the  great  law,  provided  capital  is  free  to  cm- 
bark  in  competing  lines.  In  Great  Britain  and 
throughout   Europe  generally  a  different  policy   has 


1 66  THE   EMPIRE   OF   BUSINESS 

been  pursued  in  regard  to  railways  from  that  of  the 
free-to-all  policy  which  we  have  followed.  The  rail- 
ways and  other  transportation  routes  of  Great  Britain, 
in  order  to  get  permission  to  build,  have  cost  nearly 
as  much  per  mile  as  our  cheapest  Western  lines  have 
cost  to  build.  Manchester,  for  instance,  has  recently 
decided  to  construct  a  canal,  thirty  miles  long,  to 
Liverpool,  and  the  expense  incurred  in  obtaining 
permission  from  Parliament  to  embark  capital  in  this 
enterprise  has  cost  nearly  half  a  million  of  dollars  up 
to  this  date.  The  Government,  through  a  commit- 
tee of  Parliament,  determines  whether  a  proposed 
line  is  actually  needed,  and  to  settle  this  point  every- 
body connected  with  existing  transportation  facilities 
in  the  neighbourhood  appears  before  the  committee 
to  prove  that  it  is  not  needed,  while  the  promoters 
of  the  scheme  are  at  enormous  expense  to  prove  by 
hundreds  of  experts  that  it  is.  The  empirical  decision 
of  the  committee  of  the  House  of  Commons  on  this 
question  is  not  to  be  compared  with  the  unerring 
decision  of  the  capitalists  interested.  They  know 
much  better  than  any  committee  of  the  Legislature 
are  likely  to  know  whether  the  work  in  question  will 
pay  a  fair  dividend,  and  this  is  the  best  proof  that  it 
is  required.  The  result  of  the  American  policy  is 
seen  in  the  fact  that  notwithstanding  all  the  attempts 
upon  the  part  of  our  railways  to  thwart  the  economic 
laws,   nevertheless,   the   American   people   enjoy   the 


THE     BUGABOO     OF     TRUSTS  167 

cheapest  transportation  in  the  world.  The  railway 
rates  upon  freight  in  Europe,  compared  with  those 
in  America,  show  startling  contrasts.  The  cost  of 
freightage  on  English  lines  is  upon  the  average  more 
than  double  the  American  charge,  and  in  many  cases 
which  I  have  examined  it  is  three  times  as  great.  In 
not  a  few  cases  the  British  charge  is  far  beyond  three 
times  the  American. 

A  friend  bought  a  cargo  of  grain  at  Leith,  which 
had  paid  one  dollar  per  ton  freight  from  New  York; 
it  cost  him  ninety-six  cents  per  ton  to  transport  it 
thirty-five  miles  inland.  Another  purchased  six  hun- 
dred tons  charcoal  pig-iron  upon  Lake  Superior,  which 
cost  four  dollars  per  ton  freight  to  Liverpool;  he  paid 
$2.87  per  ton  to  carry  it  eighty  miles  inland  by  rail  to 
his  mills.  For  this  amount  our  trunk  lines  carry  rails 
five  hundred  and  sixty  miles,  as  against  eighty  miles  in 
Britain.  If  Europe  enjoyed  our  advantages  of  free 
competition  in  its  transportation  system,  the  develop- 
ment of  its  resources  would  be  surprising,  even  at 
this  late  day  in  its  history.  There  is,  in  my  opinion, 
only  cause  for  hearty  congratulation  as  regards  our 
railway  policy.  Its  evils  are  trifling;  its  advantages 
over  all  other  systems  in  the  world  enormous. 

The  people  of  America  can  smile  at  the  efforts  of 
all  her  railway  magnates  and  of  all  her  manufacturers 
to  defeat  the  economic  laws  by  Trusts  or  combinations, 
or  pools,  or  "diflerentials, "  or  anything  of  like  charac- 


i68  THE   EMPIRE   OF   BUSINESS 

ter.  Only  let  them  hold  firmly  to  the  doctrine  of  free 
competition.  Keep  the  field  open.  Freedom  for  all 
to  engage  in  railroad  building  when  and  where  capital 
desires,  subject  to  conditions  open  to  all.  Freedom 
for  all  to  engage  in  any  branch  of  manufacturing 
under  like  conditions. 

There  can  be  no  permanent  extortion  of  profit 
beyond  the  average  return  from  capital,  nor  any 
monopoly,  either  in  transportation  or  manufacturing. 
Any  attempt  to  maintain  either  must  end  in  failure, 
and  failure  ultimately  disastrous  just  in  proportion 
to  the  temporary  success  of  the  foolish  effort.  It  is 
simply  ridiculous  for  a  party  of  men  to  meet  in  a  room 
and  attempt  by  passing  resolutions  to  change  the 
great  laws  which  govern  human  affairs  in  the  business 
world,  and  this,  whether  they  be  railway  presidents, 
bankers  or  manufacturers. 

The  fashion  of  Trusts  has  but  a  short  season  longer 
to  run,  and  then  some  other  equally  vain  device  may 
be  expected  to  appear  when  the  next  period  of  de- 
pression arrives;  but  there  is  not  the  slightest  danger 
that  serious  injury  can  result  to  the  sound  principles 
of  business  from  any  or  all  of  these  movements.  The 
only  people  who  have  reason  to  fear  Trusts  are  those 
foolish  enough  to  enter  into  them.  The  Consumer 
and  the  Transporter,  not  the  Manufacturer  and  the 
Railway  owner,  are  to  reap  the  harvest. 

Even  since  the  foregoing  was  written,  a  new  form 


THE     BUGABOO     OF     TRUSTS  169 

has  appeared  on  the  stage  in  the  shape  of  "The  Presi- 
dents' Agreement — an  agreement  among  gentlemen," 
in  which  the  parties  engage  to  control,  strangle  and 
restrict  the  future  development  of  our  magnificent 
railway  system  under  the  laws  of  natural  growth, 
at  a  time  when  the  country  requires  this  development 
as  much  as  it  ever  did.  These  gentlemen  are  not  go- 
ing to  engage  in  building  lines  which  will  give  the 
public  the  benefit  of  healthy  competition,  or  permit 
such  to  be  built  hereafter.  It  is  safe  to  say  that  very 
soon  this  toy  will  be  discarded,  like  its  predecessors, 
for  another,  and  that  the  very  men  apparently  most 
pleased  with  this  new  rattle  will  then  regard  it  with 
the  greatest  contempt,  and  go  forward  in  the  good 
work,  as  hitherto,  developing  the  railway  system 
wherever  and  whenever  they  think  they  see  a  fair 
chance  for  profit.  Whenever  existing  railways  exact 
from  the  public  more  than  a  fair  return  upon  the  actual 
capital  invested,  or  upon  the  capital  which  would  be 
required  to  duplicate  existing  lines,  competing  lines 
will  be  built — fortunately  for  the  interests  of  the 
country — which  is  much  more  concerned  in  getting 
cheap  transportation  than  it  is  in  insuring  dividends 
for  capitaHsts;  and  whenever  a  percentage  is  to  be 
obtained  Vjy  the  negotiation  of  railway  securities, 
bankers  will  be  found — also,  fortunately  for  the 
best  interests  of  the  country — who  will  gladly  find 
a    market    for    them    without    stopping    to    inquire 


lyo  THE   EMPIRE   OF    BUSINESS 

whether  monopoHes  are  to  be  overthrown  by  the  new 
lines. 

It  is  not  in  the  power  of  man  to  exact  for  more 
than  a  brief  season,  and  a  very  brief  season  indeed, 
unusual  profit  upon  actual  capital  invested  either 
in  Transportation  or  Manufacture,  so  long  as  all  are 
free  to  compete,  and  this  freedom,  it  may  safely  be 
asserted,  the  American  people  are  not  likely  to  re- 
strict. 


Anglo-American  Trade  Relations 

Contrasting  the  commercial  methods  of  the  two 
countries.  The  part  the  tariflf  plays  in  trade.  Pro- 
tective tariff  in  the  United  States  ;  free  trade  in 
Britain,  a  comparison  of  results. 


ANGLO-AMERICAN    TRADE    RELA- 
TIONS 

UPON  the  threshold  of  this  great  question  we 
encounter  that  evergreen  subject  of  discus- 
sion, Free  Trade  versus  Protection.  There  is  only- 
one  kind  of  Free  Trade,  but  there  are  two  kinds  of  Pro- 
tection. First:  the  British  kind,  and  then  the  Ameri- 
can variety,  very  different  indeed  in  theory  and  in 
practice.  Protection  in  Britain  simply  means  that 
the  food  of  the  people  should  be  permanently  made 
dearer  to  the  consumer,  and  consequently  that  the 
value  of  land  should  be  permanently  and  artificially 
enhanced.  Now  the  American  idea  of  Protection  is 
that  foreshadowed  by  Mill.  It  adheres  to  Adam 
Smith's  great  doctrine  that  the  end  to  be  aimed  at 
is  the  best  supply  of  an  article  at  the  lowest  price 
under  the  free  exchange  of  commodities.  Thus  he 
keeps  ever  in  view  the  consumer.  If  we  have  reason 
to  believe  that  the  resources  of  a  country  are  such  as 
only  need  development  to  furnish  a  better  and  cheaper 
supply  of  an  article  than  has  ever  been  or  could  ever 
be  obtained  from  other  lands,  we  believe  with  Adam 
Smith  that  it  is  sometimes  advisable  to  pay  dearer 
for  that  article  for  a  time,  if  the  end  be  the  conquest 

From  a  Speech  before  the  Chamber  of  Commerce,  Halifax,  Sept. 
1900. 


174  THE   EMPIRE   OF   BUSINESS 

of  a  greater  market.  Adam  Smith  was  not  a  wild 
dogmatist  upon  the  subject  of  Free  Trade:  indeed,  he 
has  recorded  his  opinion  that  he  might  as  well  expect 
Utopia  upon  earth  as  the  establishment  of  complete 
Free  Trade,  even  in  Britain ;  and  where  changes  were 
to  be  made  in  fiscal  laws,  he  is  clear  always  upon  this 
point:  that  these  must  be  slowly  made  and  without 
serious  injury  to  trade  as  it  exists.  Here  are  two 
examples  to  illustrate  the  difference  between  Protec- 
tion in  England  and  America.  During  the  war  for 
the  Union  the  American  people  were  hurt  and  in- 
censed by  hostility  shown,  not  by  the  British  people, 
but  by  the  British  Government.  They  determined 
to  limit  the  use  of  British  products  as  much  as  possi- 
ble and  especially  to  be  independent  in  the  supply  of 
iron  and  steel,  the  sinews  of  war,  since,  by  England's 
warlike  attitude  and  the  building  of  the  Alabama, 
it  was  not  as  certain  as,  thank  the  Fates !  it  is  now 
that  war  between  the  two  countries  could  not  come — 
thus  does  wrong  done  nations  or  people  bring  retri- 
bution and  every  foe  created  is  a  danger  ready  to  ex- 
plode. The  Alabama  gave  us  thirty  years'  con- 
tinuous protection,  and  enables  us  to  invade  Britain 
successfully  with  our  steel.  The  Government  asked 
manufacturers  how  much  duty  would  be  required 
to  induce  them  to  enter  the  new  business  of  making 
steel.  Up  to  that  time  we  had  made  none  success- 
fully.    Thirty  per  cent,  duty  was  asked  and  obtained. 


ANGLO-AMERICAN  TRADE  RELATIONS     175 

All  know  the  result ;  not  only  is  the  American  supplied 
with  cheaper  steel  than  any  nation  in  the  world, 
Britain  not  excepted,  but  it  is  certain  that  a  large 
part  of  the  wants  of  the  world  is  to  be  supplied  by 
this  country.  It  is  beyond  all  question  the  country 
which  can  best  produce  steel  to-day.  Now  we  think 
that  temporary  Protection  given  and  which  has  been 
reduced  to  one-fourth  its  first  extent  is  here  fully 
vindicated.  Take  the  other  case:  the  best  men  of 
every  nation  must  ever  labour  to  advance  the  material 
progress  of  that  nation  by  introducing  new  manu- 
factures, and  it  was  thought  that  with  proper  Protection 
for  a  time  the  Union  would  grow  a  full  supply  of  sugar 
cheaper  than  it  could  be  brought  from  abroad.  This 
experiment,  however,  resulted  in  failure.  We  were 
mistaken,  therefore  Protection  was  abandoned  and 
sugar  made  free.  In  the  one  case  Protection  was  a 
success,  in  the  other  a  failure.  I  think  that  what 
has  taken  place  in  the  United  States  may  be  expected 
to  take  place  in  other  nations  one  after  the  other  as 
they  develop.  Every  nation  will  try  to  produce 
within  its  own  borders  an  article  when  there  is  a  prob- 
ability of  its  being  able  to  make  it  cheaper  and  better 
than  it  could  be  had  from  abroad,  and  we  must  wait 
patiently  the  result  of  these  trials.  Just  as  the  United 
States  abandoned  the  protection  of  sugar,  so  I  believe 
other  nations  will  come  to  the  American  idea  of  Pro- 
tection, that  it  is  folly  to  protect  forever,  that  the 


176  THE   EMPIRE    OF    BUSINESS 

attempt  of  a  nation  to  benefit  itself  by  a  permanent 
tax  upon  any  article  as  a  matter  of  protection  is  akin 
to  the  attempt  of  a  man  to  raise  himself  by  pulling 
up  his  suspenders.  Thorough  believer  as  I  am  in 
the  theory  that  sometimes  it  is  wise  for  a  young  nation 
to  induce  capital  and  brains  to  engage  in  the  experi- 
ment of  manufacturing  something  new,  which  is 
always  attended  with  special  risks,  I  am  none  the  less 
a  believer  in  Adam  Smith's  great  doctrine  that  the 
end  must  be  the  free  exchange  of  commodities  by  all 
the  nations  of  the  world,  subject  only  to  the  necessity 
of  revenue,  but  this  matter  of  revenue  is  important. 

You  remember  Mr.  Chamberlain  was  at  one  time 
carried  away  with  the  idea  of  a  Zollverein  of  the  Em- 
pire; you  were  to  have  free  trade  within  its  bounds 
as  we  have  within  the  forty-five  States  embraced  in 
the  Union,  a  brilliant  idea  at  first  sight ;  but  after  con- 
ferring with  the  Colonials  at  the  Jubilee,  Mr.  Cham- 
berlain announced  that  he  could  not  be  induced  to  touch 
the  subject  with  tongs.  It  is  well  for  a  statesman  to 
change  his  opinions  when  he  finds  them  wrong.  The 
British  colonies  to-day  feel  that  they  have  to  raise 
most  of  their  revenue  from  taxing  imports,  and  there- 
fore a  Zollverein  did  not  seem  practicable — and  there 
are  other  objections.  For  instance,  the  United  States 
adds  to  its  duties  upon  sugar  an  amount  equal  to  the 
bounty  paid  by  any  nation  upon  its  growth, — this 
is  considered  only  fair  to  our  own  producers  of  sugar. 


ANGLO-AMERICAN  TRADE  RELATIONS     177 

It  is  probable,  therefore,  that  for  the  present,  prob- 
ably for  our  own  day,  the  needs  of  revenue  and  the 
impracticability  of  collecting  it  from  internal  taxes 
will  cause  the  British  Colonies  to  continue  high  duties 
upon  imports,  especially  such  as  may  be  classed  as 
luxuries,  which  mean  the  finest  things  of  all  grades; 
in  other  words,  things  used  not  by  the  masses  of  the 
poor,  but  by  the  rich  few.  Such  is  certainly  a  popular 
policy,  and  it  is  well  known  how  potent  votes  are  to 
the  politician.  The  same  influences  will,  I  believe, 
prevail  in  the  United  States.  I  know  of  no  mode  of 
raising  revenue  so  easy,  or  one  so  satisfactory  to  the 
voters.  It  may  be  a  surprise,  but  I  believe  it  is  true, 
that  under  our  present  tariff  policy  the  masses  of  the 
American  people  practically  escape  taxation.  They 
use  almost — indeed,  I  might  say  wholly — home-made 
articles;  home  tobacco,  wine,  spirits  and  beer,  home- 
made cotton  and  woollen  cloths  and  silks,  serviceable, 
but  not  so  fine  as  the  foreign,  and  all  these  are  to-day 
surprisingly  cheap.  I  had  a  proof  of  that  recently. 
A  family  in  comfortable  circumstances,  not  rich,  went 
to  England  each  year  with  their  five  children  to  visit 
parents.  Formerly,  the  cost  of  their  passage  was 
saved  by  the  purchase  of  clothing  and  other  articles. 
The  lady  told  us  she  bought  nothing  on  the  other  side 
now,  she  could  clothe  her  children  cheaper  in  New 
Yf;rk.  There  is  much  testimony  tending  to  bear  this 
out.     We  find  our  servants  who  pass  with  us  to  and 


178  THE   EMPIRE   OF   BUSINESS 

for  buying  many  articles  in  New  York,  but  pray  re- 
member, not  fine  luxurious  articles,  in  which  people 
with  ample  means  indulge.  Upon  these,  about  which 
there  need  be  no  fear  our  rich  class  will  ever  forego, 
we  can  by  high  duties  raise  a  large  amount  of  needed 
revenue,  without  greatly  restricting  the  demand. 
The  rich  classes  of  the  Republic  hesitate  little  about 
cost  in  their  luxuries,  and  fine  silks,  fine  linen,  fine 
lace,  finest  woollen  fabrics,  fine  wines  or  Scotch  whis- 
key and  British  beer  are  among  our  luxuries. 

Pray  note  this  policy  will  no  longer  be  pursued 
primarily  for  protection,  but  for  revenue  only.  Even 
if  Protection  as  a  policy  were  discarded,  it  is  probable 
such  articles  would  be  taxed — the  masses  would  de- 
mand this.  It  is  a  great  mistake  to  think  that  it  is 
the  few  and  not  the  many  who  favour  taxing  the  im- 
ported articles  used  by  the  few  rich.  It  is  my  opinion 
that  there  can  be  no  abolition  of  such  duties  in  our 
day.  This  is  the  most  popular  of  all  means  of  raising 
revenue. 

There  is  a  new  revelation  in  trade  between  nations 
which  cannot  be  overlooked.  It  may  now  be  taken 
as  established  that  raw  materials  in  favoured  parts 
of  the  world  have  now  attained  the  power  to  attract 
to  them  capital  and  ability,  so  that  they  will  as  a  rule 
be  manufactured  close  at  hand.  The  various  peoples 
display  unsuspected  capacity  for  manufacturing;  the 
poor  men  and  women  of  India,  the  Peons  of  Mexico, 


ANGLO-AMERICAN  TRADE  RELATIONS     179 

the  Negroes  of  America,  make  satisfactory  mill  opera- 
tives. The  Chinese  and  Japanese  are  becoming  so, 
also.  Britain  and  the  United  States  furnish  a  few 
heads  of  departments,  automatic  machines  need  little 
skill  in  the  mere  workers.  We  must  expect  great 
changes  to  flow  from  this  fact.  It  behooves  Britain, 
long  the  chief,  and  at  one  time,  indeed,  almost  the 
sole  manufacturing  nation  of  importance,  and  the 
United  States,  also,  to  keep  our  standard  of  efficiency 
at  the  very  highest  in  every  department.  There  may 
come  changes  amounting  to  revolution  from  this  cause. 
Sir  Sutherland,  of  the  P.  &  O.,  recently  spoke  to  his 
shareholders  of  the  probability  of  ordering  steam- 
ships in  the  Far  East.  I  think,  however,  he  will  first 
obtain  these  from  Britain  and  America — it  is  a  far  cry 
to  the  Far  East. 

While  we  may  not  look  for  any  great  increase  in  the 
foreign  trade  of  nations,  nothing  comparable,  for 
instance,  to  the  growth  of  their  domestic  trade,  since 
the  tendency  is  for  nations  to  supply  their  chief  wants, 
still,  I  believe  that  the  increase  of  the  population  and 
of  wealth,  creating  new  wants  and  extending  the  field 
of  present  wants,  must  be  such  as  to  keep  the  exchange 
of  articles  not  only  at  its  present  volume,  but  with  a 
small  ratio  of  increase.  How  small  foreign  trade  is 
at  best,  as  compared  to  internal  trade  !  In  the  case  of 
the  United  States,  notwithstanding  it  exported  manu- 
factures last  year  (1899)  to  the  extent  of  80  millions 


i8o  THE   EMPIRE   OF    BUSINESS 

sterling  ($400,000,000),  this  was  not  quite  a  paltry  five 
per  cent,  of  the  total  value  of  its  manufactures,  above 
1 ,800  millions.  There  is  little  to  fear  as  to  the  wants  of 
the  world;  Britaia's  only  concern  is  to  remain  and 
become  the  country  which  can  best  supply  them. 

So  much  for  Anglo-American  trade  relations.  In 
these  days  of  bitter  partisanship  and  sectarianism, 
it  seems  almost  essential  that  there  should  arise  a 
body  of  intelligent  men  in  each  centre  who  know 
neither  rank,  wealth,  party  nor  creed  in  their  delibera- 
tions as  members  of  such  body,  who  subordinate  all 
other  issues  to  those  which  concern  the  peace  and 
prosperity  of  their  country;  which  extends  its  view 
to  all  peoples  of  all  lands,  rightly  regarding  men  every- 
where as  a  brotherhood,  boimd  together  and  therefore 
dependent  in  greater  or  less  degree  in  a  common  pros- 
perity; and  which  sees  in  the  peace  and  prosperity 
of  other  nations  results  not  antagonistic  but  tributary 
to  their  own,  discarding  these  narrow  conceptions 
of  the  ordinary  politician  who  sees  in  war  against 
other  lands  benefit  to  his  own,  and,  I  fear,  sees  even 
more  clearly  popularity  for  himself.  It  is  essentially 
true  concerning  commercial  nations  especially,  such 
as  Great  Britain  long  has  been  and  must  remain,  and 
such  as  our  newer  republic  is  becoming,  which  is  fast 
sharing  with  the  mother  country  the  business  of  the 
world — that  there  is  no  measure  of  prosperity  in  any 
part  of  the  world  in  which  we  do  not  share.     The 


ANGLO-AMERICAN  TRADE  RELATIONS     i8i 

whole  world  pays  tribute  to  the  nations  which  supply 
in  any  considerable  degree  its  wants.  Hence  the 
greatest  interest  of  Britain  and  of  America  is  peace. 
Hence,  also,  a  wise  policy  to  sustain  peace,  a  grave 
error  of  policy  to  disturb  it,  since  we  cannot  destroy 
the  prosperity  of  any  nation  without  impairing  our 
own.  Any  seeming  temporary  gain  from  the  injury 
of  others  is  really  loss  in  the  end.  This  is  perhaps 
what  may  be  called  a  view  for  the  future,  but  steps 
toward  its  acceptance  are  being  taken  even  in  our  own 
day.  The  first  step  lies  in  exploding  the  idea  that 
trade  follows  the  flag ;  the  fact  is  that  trade  scents  the 
best  bargain.  Trade  is  no  respecter  of  flags;  loyal 
Canada  buys  her  Union  Jacks  in  New  York.  She 
trades  with  the  Republic  to  three  times  the  extent  she 
trades  with  England  and  to  a  greater  extent  than  with 
all  other  nations  combined.  In  vain  does  any  nation 
seek  political  or  nominal  control  over  foreign  territory 
with  a  view  to  permanent  commercial  advantage  under 
free  trade  or  equal  laws  for  all.  She  secures  or  holds 
only  the  market  which  she  can  best  supply.  To 
spend  millions  of  money  and  thousands  of  lives  for  the 
political  control  of  new  territory  may  be  considered 
necessary  sometimes  for  political  reasons,  but  never 
for  the  requirements  of  trade.  Wc  shall  have  gained 
one  step  forward  then  when  it  is  freely  recognized  that 
political  acquisition  is  not  essential  for  acquiring  the 
trade  of  new  territory.     This  truth  even  America  just 


i82  THE   EMPIRE   OF    BUSINESS 

now  needs  to  releam,  since  she  is  trying  to  acquire 
political    control    of    the    Philippines.     British    and 
American  interests  are  safeguarded  when  equal  laws 
for  all  nations  are  secured.     Thus  the  interests  of  both 
countries  in  foreign  trade  have  become  the  same  and 
should  lead  to  a  common  policy — the  Open  Door  and 
Peace,  allowing  all  nations,  all  peoples  to  follow  their 
own  laws  of  development  in  perfect  freedom.     We 
have  had  many  proofs  recently  of  the  familiar  adage 
that  blood  is  thicker  than  water,  very  much  thicker 
as  I  believe,  between  the  members  of  our  own  race. 
In  the  evident  drawing  together  of  the  English-speak- 
ing race  and  all  that  this  implies  we  see  the  dawn  of 
a  new  sentiment  rising — the  Patriotism  of  Race,   a 
sentiment  of  pride  and  devotion  in  the  race  now  given 
by  one  half  of  the  race  to  the  Union  Jack,  and  by  the 
other  half  of  the  race  to  the  Stars  and  Stripes — the 
other  of  the  two  flags  which  unitedly  hold  sway  over 
all  English-speaking  men,   for  no  community  exists 
speaking  our  tongue  which  does  not  owe  allegiance 
to  one  or  the  other  of  these  symbols.     The  silver  lining 
to  the  clouds  of  war  in  which,  alas !  the  two  branches 
of  our  race  are  at  present  engaged,  is  that  it  has  so 
turned  out  that  these  now  stand  closer  to  each  other 
than  at  any  time   since  they   separated.     We   may 
safely,  I  believe  quite  safely,  assume  that  no  question 
can  even  arise  between  the  two  nations  but  one  people, 
which  will  not  be  amicably  settled,  that  no  govern^ 


ANGLO-AMERICAN  TRADE  RELATIONS     183 

ment  can  ever  exist  in  either  land  strong  or  wicked 
enough  to  resist  the  demand  of  the  best  of  the  people 
of  both  that  the  settlement  of  differences  shall  not  be 
by  the  brutal  arbitrament  of  the  sword.  The  day  has 
passed  when  English-speaking  men  will  ever  be  called 
upon  to  kill  each  other  in  battle.  The  sun  is  never 
again  to  shine  upon  such  a  spectacle.  We  have  passed 
that  stage  and  turned  down  the  pages  of  that  horrid 
story  forever. 

What  then  of  the  future  charged  with  this  potent 
new  sentiment  of  race  patriotism  which  seems  dawn- 
ing upon  us  ?  Our  own  race  especially  is  prone  to  the 
disease  known  as  land  hunger.  Great  Britain  has 
spread  the  red  spots  of  sovereignty  all  over  the  world ; 
we  have  stretched  from  the  shores  of  the  Atlantic 
three  thousand  miles  to  the  Pacific,  from  the  St. 
Lawrence  to  the  Gulf  of  Mexico,  and,  not  content,  I 
fear  following  Britain's  perilous  example,  we  are  try- 
ing to  annex  foreign  territory.  The  truth  is  that  we 
have  taken  the  Scripture  much  to  heart,  which  tells 
us  that  the  meek  shall  inherit  the  earth,  and  which, 
our  humorist  Mark  Twain  said,  explained  it  all— our 
race  is  so  meek ;  at  all  events  we  seem  to  have  lost  no 
time  in  discovering  that  the  true  and  only  reliable 
proof  of  the  true  inheritors  was  whether  they  spoke 
English. 

This  expanding  epoch  must  soon  pass.  It  is  the 
law  of  development  that  each  country  shall  eventually 


i84  THE   EMPIRE    OF    BUSINESS 

rule  itself.  Canada  does  so,  Australia  is  about  to 
assume  sovereign  sway,  both  have  their  own  fiscal 
tariffs,  against  even  England's  products.  The  seven- 
teen Republics  of  South  America  only  recently  gov- 
erned by  Spain  are  now  all  independent  and  self- 
governing.  It  is  only  during  the  periods  of  develop- 
ment that  distant  Powers  can  govern  and  hold  sway 
over  a  people,  but  during  this  stage  such  may  be  the 
benign  effects  of  the  government  that  even  after 
practical  control  has  been  taken  over  by  the  new  com- 
mtmity,  the  ties  between  mother  and  child  may  not 
only  remain  unbroken,  but  stronger  than  ever  before. 
Of  this  Canada  and  Australia  give  ample  proof.  By 
the  wise,  kind,  peaceful,  and  conciliatory  policy  pur- 
sued a  race  patriotism  has  been  created  within  the 
Empire  which  depends  upon  moral  forces,  the  most 
enduring  of  all,  not  upon  law  but  upon  love.  The 
success  of  Britain's  colonial  policy  in  recent  times  is 
one  of  the  grandest  triumphs  ever  achieved  by  a  nation 
perhaps  the  grandest  of  all.  It  has  been  possible 
only  by  peaceful,  not  by  warlike  means,  a  victory 
much  more  renowned  than  any  conquest  by  force  and 
more  enduring,  as  the  future  is  to  show. 

The  flag  of  great  Britain  floats  over  Canada  and 
Australia;  by  the  desire  of  their  people  they  are  part 
of  the  solid  united  whole,  and  the  question  now  is 
whether  this  federation  of  the  race  is  to  stop  within 
the  Empire,  or  finally  develop  into  a  federal  council  for 


ANGLO-AMERICAN  TRADE  RELATIONS     185 

the  entire  race  governing  international  relations  which 
involve  the  peace  of  the  world,  and  leaving  home  rule 
to  each  country  in  all  other  affairs,  even  as  to  the  form 
of  government  itself,  a  crowned  or  uncrowned  re- 
public. I  am  on  record  as  having  predicted  years 
ago  that  our  English-speaking  race  would  one  day  be 
again  iinited,  and  it  was  not  so  very  long  since.  Here 
is  a  fit  field  for  our  Chamber  of  Commerce  to  culti- 
vate, for  it  lies  in  the  direction  of  peace  and  goodwill. 
For  the  present  at  least  they  can  exert  their  influence 
to  strengthen  the  good  feeling,  the  drawing  together 
of  the  two  branches.  I  failed  to  mention  one  of  the 
best,  perhaps  the  best,  of  all  the  results  of  our  tempo- 
rary policy  of  Protection.  It  has  brought  to  us  so 
many  British  manufacturers  to  establish  industries 
and  thus  develop  our  resources — the  Clarks  and  the 
Coats  of  Paisley,  the  Dolans  of  Yorkshire,  the  Sander- 
sons of  Sheffield,  and  last,  but  certainly  not  least,  a 
great  prize  from  Halifax.  Who  could  expect  us  not 
to  extol  our  idea  of  Protection  if  we  capture  the  Firths  ? 
We  must  not  line  them  up  for  a  king's  ransom,  we 
need  as  many  of  the  Halifax  quality  as  can  be  had. 
Whenever  our  tariffs  suit,  all  may  take  a  sweeping 
revenge,  come  over  and  enjoy  perfect  free  trade  in 
the  forty-five  nations  of  the  Union  and  be  happy. 
The  Republic  calls  them  to  come  one,  come  all.  It 
taxes  highest  the  gems  and  precious  things  imported, 
but  these  jewels  beyond  price  are  admitted  duty  free. 


1 86  THE   EMPIRE   OF    BUSINESS 

It  is  not  only  for  their  value  industrially  that  they 
should  be  valued,  but  as  links  binding  the  old  and 
the  new  lands,  the  mother  and  child  together.     Some 
of  the  younger  members  of  the  firm  settle  among  us, 
their  children  marry  Americans,  or  when  they  visit 
the  old  home,  contract  alliances  there,  and   the  true 
Anglo-American  is  the  result,  who  is  not  unlikely  to 
prove  the  coming  man,  possessed  of  the  virtues  and 
strength  of  both  races  and  the  vices  or  weakness  of 
neither,  and  who,  at  all  events,  we  may  rest  assured, 
will  be  the  foremost  disciple  of  race  patriotism  and 
labour  for  the  coming  of  the  day  of  common  citizen- 
ship within  the  wide  and  ever  expanding  boimdaries 
of  our  race. 


« 


Business  " 


Business  is  a  large  word  and  in  its  primary  meanings 
covers  the  whole  range  of  man's  efforts.  The  same 
principles  of  thrift,  energy,  concentration  and  brains 
win  success  in  any  branch  of  business  from  medicine 
to  dry  goods. 


"  BUSINESS  " 

BUSINESS  is  a  large  word,  and  in  its  primary 
meaning  covers  the  whole  range  of  man's  efforts. 
It  is  the  business  of  the  preacher  to  preach,  of  the  physi- 
cian to  practise,  of  the  poet  to  write,  the  business  of  the 
university  professor  to  teach,  and  the  business  of  the 
college  student,  one  might  sometimes  think,  from  the 
amount  of  attention  bestowed  upon  it,  to  play  football. 
I  am  not  to  speak  of  "business"  in  this  wide  sense, 
but  specifically  as  defined  in  the  Century  Dictionary: 

"  Mercantile  and  manufacturing  pursuits  collectively;  employ- 
ment requiring  knowledge  of  accounts  and  financial  methods;  the 
occupation  of  conducting  trade;  or  monetary  transactions  of  any 
kind." 

The  illustration  which  follows  is  significant,  and 
clearly  defines  this  view  of  business.     It  reads: 

"  It  seldom  happens  that  men  of  a  studious  turn  acquire  any 
degree  of  reputation  for  their  knowledge  of  business." 

But  we  must  go  one  step  further,  more  strictly  to 
define  business,  as  I  am  to  consider  it.  Is  a  railway 
president  receiving  a  salary,  or  the  president  of  a  bank, 
or  a  salaried  officer  of  any  kind,  in  business?  Strictly 
speaking,  he  is  not ;  for  a  man,  to  be  in  business,  must 
be   at   least   part  owner  of    the  enterprise   which   he 

From  a  Lecture  delivered  at  Cornell  University.  January  i  i,  1896 

189 


I90  THE   EMPIRE   OF   BUSINESS 

manages  and  to  which  he  gives  his  attention,  and 
chiefly  dependent  for  his  revenues  not  upon  salary  but 
upon  its  profits.  This  view  rules  out  the  entire  salaried 
class.  None  of  these  men  are  now  men  in  business, 
but  many  of  them  have  been,  and  most  successful 
therein.  The  business  man  pure  and  simple  plunges 
into  and  tosses  upon  the  waves  of  human  affairs  without 
a  life-preserver  in  the  shape  of  salary ;  he  risks  all. 

CHOICE    OF   A   CAREER 

There  is  no  great  fortune  to  come  from  salary,  how- 
ever high,  and  the  business  man  pursues  fortune.  If 
he  be  wise  he  puts  all  his  eggs  in  one  basket,  and  then 
watches  that  basket.  If  he  is  a  merchant  in  coffee, 
he  attends  to  coffee ;  if  a  merchant  in  sugar,  he  attends 
to  sugar  and  lets  coffee  alone,  and  only  mixes  them 
when  he  drinks  his  coffee  with  sugar  in  it.  If  he  mine 
coal  and  sell  it,  he  attends  to  the  black  diamonds;  if 
he  own  and  sails  ships,  he  attends  to  shipping,  and  he 
ceases  to  insure  his  own  ships  just  as  soon  as  he  has 
surplus  capital  and  can  stand  the  loss  of  one  without 
imperilling  solvency ;  if  he  manufacture  steel,  he  sticks 
to  steel,  and  severely  lets  copper  alone;  if  he  mine 
ironstone,  he  sticks  to  that,  and  avoids  every  other 
kind  of  mining,  silver-  and  gold -mining  especially. 
This  is  because  a  man  can  thoroughly  master  only  one 
business,  and  only  an  able  man  can  do  this.  I  have 
never  yet  met  the  man  who  fully  understood  two  dif- 


BUSINESS  191 

ferent  kinds  of  business;  you  cannot  find  him  any 
sooner  than  you  can  find  a  man  who  thinks  in  two 
languages  equally  and  does  not  invariably  think  only 
in  one. 

Subdivision,  specialization,  is  the  order  of  the  day. 

EVERY  MAN  TO  HIS  TRADE  OR  HIS  SPECIALTY 

I  have  before  me  many  representatives  of  all  classes 
of  students.  If  I  could  look  into  your  hearts,  I  should 
find  many  differing  ambitions;  some  aiming  at  dis- 
tinction in  each  of  the  professions;  some  would  be 
lawyers,  some  ministers,  some  doctors,  some  architects, 
some  electricians,  some  engineers,  some  teachers,  and 
each  sets  before  him,  as  models,  honoured  names  that 
have  reached  the  highest  rank  in  these  professions. 
The  embryo  lawyers  before  me  would  rival  Marshall 
and  Story  of  the  past,  or  Carter  and  Choate  of  the 
present;  the  preacher  would  be  a  Brooks  or  a  Van 
Dyke;  the  physician  a  Janeway  or  a  Garmany;  the 
editor  would  be  a  Dana;  the  architect  a  Richardson, 
and,  having  reached  the  top  of  his  darling  profession, 
his  ambition  then  would  be  satisfied.  At  least,  so 
he  thinks  at  present.  With  these  classes  I  have 
nothing  whatever  to  do  directly  to-day,  because  all 
these  are  professional  enthusiasts.  Nevertheless,  the 
qualities  essential  for  success  in  the  professions  being 
in  the  main  the  same  which  insure  success  in  business, 
much  that  I  have  to  say  appHcs  equally  to  you  all. 


192  THE   EMPIRE   OF    BUSINESS 

There  remain  among  you  those  who  would  sail 
the  uncertain  sea  of  business,  and  devote  themselves 
to  making  money,  a  great  fortime,  so  that  you  shall  be 
millionnaires.  I  am  sure  that  while  this  may  be  chiefly 
in  your  thoughts,  it  is  not  all  you  seek  in  a  business 
career;  you  feel  that  in  it  there  is  scope  for  exercise  of 
great  abilities,  of  enterprise,  energy,  judgment,  and 
all  the  best  traits  of  human  nature,  and  also  that  men 
in  business  perform  useful  service  to  society. 

I  am  to  try  to  shed  a  little  light  upon  the  path  to 
success,  to  point  out  some  of  the  rocks  and  shoals  in 
that  treacherous  sea,  and  give  a  few  hints  as  to  the 
mode  of  sailing  your  ship,  or  rowing  your  shell,  whether, 
for  instance,  the  quick  or  the  slow  stroke  is  surer  to 
win  in  the  long  race. 

THE    START    IN    LIFE 

Let  us  begin,  then,  at  the  beginning.  Is  any  would- 
be  business  man  before  me  content  in  forecasting  his 
future,  to  figure  himself  as  labouring  all  his  life  for  a 
fixed  salary?  Not  one,  I  am  sure.  In  this  you  have 
the  dividing  line  between  business  and  non-business; 
the  one  is  a  master,  and  depends  upon  profits,  the  other 
a  servant,  and  depends  upon  salary.  Of  course,  you 
have  all  to  begin  as  servants  with  salary,  but  you  have 
not  all  to  end  there. 

You  have  some  difficulty  in  obtaining  a  start,  great 
difficulty  as  a  rule,  but  here  comes  in  the  exceptional 


BUSINESS  193 

student.  There  is  not  much  difficulty  for  him;  he  has 
attracted  the  attention  of  his  teachers  who  know 
many  men  of  affairs;  has  taken  prizes;  he  is  head  of 
his  class;  has  shown  unusual  ability,  founded  upon 
characteristics  which  are  sure  to  tell  in  the  race ;  he  has 
proved  himself  self-respecting,  has  irreproachable 
habits,  good  sense,  method,  untiring  industry,  and 
his  spare  hours  are  spent  in  pursuing  knowledge,  that 
being  the  labour  in  which  he  most  delights. 

One  vital  point  more :  his  finances  are  always  sound, 
he  rigorously  lives  within  his  means,  and  last,  but  not 
least,  he  has  shown  that  his  heart  is  in  his  work.  Be- 
sides all  this,  he  has  usually  one  strong  guarantee  of 
future  industry  and  ambitious  usefulness,  he  is  not 
burdened  with  wealth ;  it  is  necessary  that  he  make  his 
own  way  in  the  world.  He  is  not  yet  a  millionnaire, 
but  is  only  going  to  be  one.  He  has  no  rich  father, 
or,  still  more  dangerous,  rich  mother,  who  can,  and 
will,  support  him  in  idleness  should  he  prove  a  failure; 
he  has  no  life-preserver,  and  therefore  must  sink  or 
swim.  Before  that  young  man  leaves  college  he  is  a 
marked  man.  More  than  one  avenue  is  open  for  him. 
The  door  opens  before  he  is  ready  to  knock;  he  is 
waited  for  by  the  sagacious  employer.  Not  the  written 
certificate  of  his  professor,  for  certificates  have  generally 
to  be  read,  and  are  read  within  the  lines;  but  a 
word  or  two  spoken  to  the  business  man  who  is  always 
on   the  lookout  for  the  exceptional  young  graduate, 


194  THE   EMPIRE   OF   BUSINESS 

has  secured  the  yoiing  man  all  that  a  young  man 
needs — a  start.  The  most  valuable  acquisition  to 
his  business  which  an  employer  can  obtain  is  an  ex- 
ceptional young  man;  there  is  no  bargain  so  fruitful 
for  him  as  this. 

It  is,  of  course,  much  more  difficult  for  only  the 
average  student ;  he  has  generally  to  search  for  em- 
ployment, but  finally  he  also  gets  a  start. 

OPENINGS  TO  SUCCESS 

It  is  the  career  of  the  exceptional  student  which 
illustrates  the  pathway  to  success.  We  need  not 
render  ourselves  anxious  about  him ;  he  is  all  right.  He 
has  been  thrown  into  the  sea,  but  he  does  not  need  any 
life-preserver;  he  does  not  need  to  be  coddled,  he  will 
swim ;  he  was  not  bom  to  be  drowned,  and  you  see  him 
breast  the  waves  year  after  year  imtil  he  is  at  the  head 
of  a  great  business.  His  start,  of  course,  is  not  at  the 
head,  he  is  at  the  foot;  fortunately  so,  for  that  is  the 
reason  his  progress  has  always  been  upward.  If  he 
had  started  high  he  would  not  have  had  the  chance  to 
make  a  continual  ascent.  It  does  not  matter  much 
how  he  starts,  for  the  qualities  in  him  are  such  as  to 
produce  certain  effects  in  any  field  he  enters.  He 
goes  forward  upon  a  very  small  salary,  performing 
certain  small  uses,  indeed,  much  smaller  than  he  thinks 
himself  capable  of  performing,  but  these  he  performs 
thoroughly. 


BUSINESS  195 

Some  day  in  some  way  something  happens  that 
brings  him  to  the  notice  of  his  immediate  superior.  He 
objects  to  some  plan  proposed,  and  thinks  it  can  be 
bettered  in  some  way,  or  he  volimteers  to  assist  in  a  de- 
partment other  than  his  own ;  or,  he  stays,  one  day,  later 
at  his  work  than  usual,  or  goes  some  morning  sooner, 
because  there  was  some  part  of  the  business  that  had 
not  been  entirely  settled  the  night  before,  or  there  was 
something  to  start  next  morning  that  he  was  afraid 
might  not  be  ready  or  just  right,  and  he  "  just  goes  down 
early  to  be  sure."  His  employer  has  been  somewhat 
anxious  upon  the  same  point,  and  he,  too,  goes  down 
early  that  morning  and  finds  his  salaried  young  man, 
showing  that  he  does  not  work  for  salary  alone;  it  is 
not  solely  an  affair  of  "hire  and  salary"  with  him;  he 
is  not  that  kind  of  a  young  man ;  he  is  working  for  the 
success  of  the  business.  Or  it  may  be  that  some  day 
his  employer  proposes  a  certain  mode  of  action  in  re- 
gard to  a  customer's  account ;  perhaps  the  young  man 
has  started  in  the  office,  and  has  been  asked  to  look 
after  the  credits,  a  most  important  part.  His  em- 
ployers wish  to  close  this  credit,  which,  perhaps,  would 
embarrass  the  customer.  This  young  man,  known  to 
the  customer,  has  had  to  visit  his  place  occasionally 
in  the  course  of  business,  collecting  his  accounts,  or 
trying  to  collect  them,  and  the  young  man  modestly 
says  he  is  a  splendid  fellow,  V)ound  to  succeed,  docs  his 
business  upon  fair  and  wise  methods,  and  only  needs 


196  THE    EMPIRE   OF    BU^NESS 

a  little  temporary  indulgence  to  come  out  all 
right. 

The  employer  has  faith  in  the  young  man's  judg- 
ment and  ability,  thinks  it  a  rather  strong  suggestion 
for  a  clerk  to  make,  but  says  to  him:  "  You  look  out 
for  this  matter,  and  see  that  we  do  not  lose;  but,  of 
course,  we  do  not  wish  to  injure  one  of  our  customers ; 
if  we  can  help  him  without  risk  we  wish  to  do  it." 
The  yoting  man  takes  the  matter  in  hand,  and  results 
prove  he  was  quite  right;  the  customer  becomes  one 
of  the  very  best  of  all  their  customers,  and  one  that  it 
would  require  a  great  deal  to  take  away  from  the  firm. 

Or,  perhaps,  the  bright  young  man  may  have  noted 
the  insurance  policies  upon  the  works,  and  their  dates 
of  expiration ;  he  finds  the  fact  has  been  overlooked — 
that  some  of  the  insurances  have  lapsed  and  are  in- 
valid. It  is  none  of  his  business;  he  is  not  paid  to 
look  after  the  insurance  of  the  firm;  in  one  sense — 
the  narrow  sense — that  is  the  business  of  some  other 
man,  but  he  ventures  to  call  attention  to  the  fact,  and 
suggests  that  the  premiums  should  be  paid.  But, 
now  mark  the  advantage  of  general  reading  and  educa- 
tion. This  young  man  has  read  the  newspapers  and 
reviews,  and  learns  of  several  "sharp  business  prac- 
tices" by  which  the  insurer  is  sometimes  defrauded 
of  his  insurance,  and  especially  has  he  read  of  new 
methods  and  cheap  plans  of  insurance.  He  suggests 
that  it  would  be  well  to  change  this  and  that  policy 


BUSINESS  197 

to  another  and  very  solid  old  company.  You  see, 
gentlemen,  the  business  man  of  this  day  has  to  read, 
yes,  and  study,  and  go  to  the  roots  of  many  things, 
that  he  may  avoid  the  pitfalls  that  surround  business 
upon  every  side.  He  would  not  be  an  employer 
worth  having  that  did  not  note  what  kind  of  a  young 
man  that  was,  although  now  in  the  humble  guise  of  a 
clerk. 

THE    SECOND    STEP    UPWARD 

Suppose  he  is  an  electrician  or  engineer,  and  comes 
from  Sibley,  which  is  a  good  place  to  come  from.  In 
the  great  manufacturing  concern  so  fortunate  as  to 
secure  his  services,  he  has  to  do  with  some  humble 
branch  of  the  work,  but  he  discovers  that  there  are  a 
few  boilers  which  are  not  quite  safe,  and  that  the  en- 
gines or  motors  are  built  upon  false  mechanical  prin- 
ciples, and  are  very  wasteful  of  fuel,  and  that  one  of 
the  engines  will  soon  give  trouble;  there  is  a  founda- 
tion under  it  upon  which  he  finds  that  the  contractor 
has  not  done  honest  work ;  or  dropping  into  the  works 
one  night  just  to  see  that  all  is  going  well,  perhaps  he 
discovers  that  a  man  trusted  by  the  firm  has  fallen 
into  bad  habits,  and  is  not  fit  for  duty,  or  perhaps  is 
not  on  duty,  and  that  an  accident  might  thus  happen. 
He  feels  it  to  be  his  duty  to  take  action  here  and  safe- 
guard the  business  from  the  danger  of  an  accident.  I  le 
draws  the  plans  which  show  some  defects  in  the  machin- 


198  THE   EMPIRE   OF   BUSINESS 

ery,  lays  it  before  his  employers  with  suggestions  how  to 
cure  these,  made  upon  the  latest  scientific  principles  that 
he  had  been  taught  in  Sibley.  The  employer,  of 
course,  is  very  averse  to  spend  money,  and  angry  to 
learn  that  his  machinery  is  not  what  it  should  be. 
But  although  his  anger  explodes  and  envelops  the 
young  man  for  a  moment,  he  is  not  shooting  at  him; 
when  the  debris  clears  off  he  sits  down  and  learns  from 
the  young  man  what  a  few  thousand  dollars  now 
might  save,  and  the  result  is  that  he  tells  the  Sibley 
boy  he  wishes  him  to  take  up  this  subject  and  attend 
to  it,  and  be  sure  to  make  all  right. 

Already  that  young  man's  fortune  is  almost  as 
good  as  made.  He  could  not  hide  his  light  under 
a  bushel  if  he  tried,  and  the  coming  business  man  is 
not  excessively  liable  to  that  sin,  and  does  not  want  to ; 
he  is  business  all  over.  There  is  no  affectation  or  false 
modesty  about  him.  He  knows  his  business,  and  he 
feels  fully  conscious  and  proud  of  the  fact  that  he 
knows  it,  and  that  is  one  of  the  many  advantages 
Sibley  gives  him,  and  he  is  determined  that  his  em- 
ployer should  not,  at  least  upon  that  point,  know  less 
than  he  does.  You  must  never  fail  to  enlighten  your 
employer.  You  cannot  keep  such  a  young  man  as 
that  back ;  and  this  let  me  tell  you,  no  employer  wishes 
to  keep  him  back.  There  is  only  one  person  as  happy 
at  finding  this  young  man  as  the  young  man  is  in  find- 
ing himself,  and  that  is  his  employer.     He  is  worth  a 


BUSINESS  199 

million  more  or  less,  but  of  course,  it  would  not  be 
good  for  him  to  get  it,  while  so  young. 

He  has  now  made  two  steps  upward.  First,  he  has 
got  a  start,  and,  secondly,  he  has  satisfied  his  employer 
that  he  renders  exceptional  service,  a  decisive  step ;  as 
the  French  say,  "he  has  arrived,"  and  he  is  there  to 
stay.  His  foot  is  upon  the  ladder ;  how  high  he  climbs 
is  his  own  affair.  He  is  among  the  few  within  the 
ver>"  threshold  of  the  whole  business. 

There  is  a  good  deal  to  be  done  after  this,  however. 
This  young  man  has  zeal  and  ability,  and  he  has  shown 
that  he  has  also  that  indispensable  quality — judg- 
ment ;  and  he  has  shown  another  indispensable  quality 
— that  his  heart  is  in  the  business ;  that  no  other  cause 
takes  him  from  it ;  that  he  pushes  aside  the  very  seduc- 
tive temptations  which  surround  young  men,  and 
concentrates  his  attention,  his  time,  his  efforts,  upon 
the  performance  of  his  duties  to  his  employer.  All 
other  studies,  occupations,  and  all  amusements  are 
subordinate  to  the  business,  which  holds  paramount 
sway.  His  salar\',  of  course,  increases.  If  he  has 
happened  to  engage  with  an  emjiloyer  who  does  not 
fully  appreciate  such  services  as  he  has  rendered,  and 
is  ready  to  render,  other  employers  have  not  failed  to 
note  that  here  is  that  rare  article,  the  exceptional 
young  man,  in  the  service  of  their  rival,  and  it  is  possi- 
ble that  our  young  hero  may  have  to  change  employ- 
ers.    It  does  not  often  happen,  but  it  does  sometimes, 


200  THE   EMPIRE   OF    BUSINESS 

that  a  young  man  has  to  do  so.  As  a  rule,  the  em- 
ployer is  only  too  thankful  that  such  a  young  man  has 
come  to  him,  and  he  makes  it  his  interest  to  remain. 
Confidence  is  a  matter  of  slow  growth,  however,  and 
it  is  a  far  cry  from  a  high  salary  as  a  hireling,  into 
equality  as  a  partner. 

THE     CRUCIAL     QUESTION 

Let  us  trace  him  a  little  further.  This  young  man's 
services  to  the  firm  have  been  such  as  to  render  it  neces- 
sary some  day  that  he  should  visit  his  employer  at  his 
house.  It  is  not  long  before  many  occasions  arise 
which  call  the  young  man  to  the  house,  where  he  is 
now  favoured  upon  his  merits  by  the  household,  and  to 
whom  his  nature  soon  becomes  known,  and  the  master 
soon  begins  to  ask  himself  whether  he  might  not  some 
day  make  him  a  partner,  and  then  comes  the  question 
of  questions :  Is  he  honest  and  true  f  Let  me  pause 
here  one  moment.  Gentlemen,  this  is  the  crucial 
question,  the  keystone  of  the  arch;  for  no  amount  of 
ability  is  of  the  slightest  avail  without  honour.  When 
Bums  pictured  the  Genius  of  Scotland  in  "  The  Vision, " 
these  marvellous  words  came  to  him : 


Her  eye,  ev'n  tum'd  on  empty  space, 
Beam'd    keen    wi'    honour. 


No  concealment,  no  prevarication,  no  speculation, 
trying  to  win  something  for  which  no  service  is  given ; 


BUSINESS  201 

nothing  done  which,  if  pubHshed,  would  involve  your 
shame.  The  business  man  seeks  first  in  his  partner 
"the  soul  of  honour,"  one  who  would  swer\'e  from  the 
narrow  path  even  to  serve  him  would  only  forfeit  his 
confidence.  Is  he  intelligent?  Is  he  capable  of  form- 
ing a  correct  judgment,  based  upon  knowledge,  upon 
distant  and  far-reaching  issues?  Young  men,  yes, 
and  old  men  also,  sometimes  marry  in  haste,  which  is 
very  foolish  in  both  classes.  But  there  is  this  to  be 
said  for  the  partnership — it  is  rarely  entered  upon  in 
a  hurry.  It  is  not  one  or  two  qualities  which  insure  it, 
but  in  all-round  character,  desirable  in  many  respects, 
highly  objectionable  in  none,  and  with  special  ability 
in  one  or  two. 

We  often  hear  in  our  day  that  it  is  impossible  for 
young  men  to  become  owners,  because  business  is 
conducted  upon  so  great  a  scale  that  the  capital  neces- 
sary reaches  millions,  and,  therefore,  the  young  man  is 
doomed  to  a  salaried  life.  Now  there  is  something  in 
that  view  only  so  far  as  the  great  corporations  are 
concerned,  because  an  interest  in  these  is  only  attain- 
able by  capital ;  you  can  buy  so  many  shares  for  so 
many  dollars,  and  as  the  class  of  young  men  I  address 
are  not  willing  to  remain  forever  salaried  men,  l)ut 
arc  determined  sooner  or  later,  to  become  business 
men  upon  their  own  account,  as  masters,  I  do  not  be- 
lieve that  employment  in  a  great  corporation  is  as 
favourable  for  them  as  with  [)rivate  owners,  because, 


202  THE    EMPIRE   OF    BUSINESS 

while  a  young  man  can  look  forward  to  a  large  salary 
in  their  service,  that  is  all  to  which  he  can  aspire. 
Even  the  presidents  of  these  corporations,  being  only 
salaried  men,  are  not  to  be  classed  as  strictly  business 
men  at  all.  How,  then,  can  a  young  man  under  them 
be  anything  but  a  salaried  man  his  life  long  ? 

WHERE    TO    LOOK    FOR    OPPORTUNITIES 

Many  a  business  which  has  long  been  successful  as  a 
partnership  is  put  into  a  joint  stock  concern,  and  the 
shares  are  offered  in  the  market,  and  professional  men, 
guilelessly  innocent  of  business,  and,  sometimes, 
women  of  a  speculative  turn,  and,  I  am  sorry  to  say, 
many  times  clergymen,  and  artists,  are  deluded  into 
purchasing.  The  public  buys  the  business,  but  they 
should  have  bought  the  man  or  men  who  made  the 
business. 

You  remember  the  Travers  story?  A  friend  called 
Travers  in  to  see  a  dog  that  he  wished  to  buy  to  clear 
his  conservatory  of  rats,  and  when  the  dog-fancier 
undertook  to  show  him  how  this  dog  demolished  these 
pests,  one  great,  big  old  rat  chased  the  dog.  Travers's 
friend  said  to  him: 

"What  would  you  do?" 

Travers  replied :     "  B-b-b-buy  the  rat. " 

The  public  often  buys  the  wrong  thing. 

It  would  be  an  excellent  study  for  you  to  read  fre- 
quently the  stock-lists  of  miscellaneous   companies. 


BUSINESS  203 

You  will  find  some  of  the  newspapers  give  the  list,  and 
then  note  the  par  value  of  the  shares  and  the  price  at 
which  you  may  purchase  them.  It  may  be  said  that 
this  par  value  is  upon  fictitious  capital.  That  is  so 
only  in  some  instances;  in  manufacturing  companies 
especially  I  think  the  reverse  is  the  rule.  The 
capital  does  not  fully  represent  the  cost  of  the 
properties. 

But  there  are  many  corporations  which  are  not  cor- 
porations, many  instances,  of  partnership  in  which  the 
corporate  form  has  been  adopted,  and  yet  the  business 
continued  substantially  as  a  partnership,  and  com- 
paring such  institutions  with  the  great  corporations 
whose  ownership  is  here,  there,  and  everywhere,  we 
find  a  most  notable  difference.  Take,  for  instance, 
the  great  steamship  lines  of  the  world.  Most  of  these, 
as  those  of  you  who  read  well  know,  fail  to  make  re- 
turns to  their  shareholders.  The  shares  of  some  of 
the  greatest  companies  have  been  selling  at  one-half 
and  sometimes  one-third  their  cost.  These  are  cor- 
porations, pure  and  simple,  but  if  we  look  at  other  lines 
engaged  upon  the  same  oceans,  which  are  managed  by 
their  owners  and  in  which,  generally,  one  great  business 
man  is  deeply  interested  and  at  the  head,  we  find  large 
dividends  each  year  and  amounts  placed  to  the  reserve 
fund.  It  is  the  difference  between  individualism  and 
communism  applied  to  business,  between  the  owners 
managing  their  own  business  as  partners,  and  a  joint 


204  THE    EMPIRE    OF    BUSINESS 

stock  concern  of  a  thousand  shifting  owners  ignorant 
of  the  business. 

The  same  contrast  can  be  drawn  in  every  branch  of 
business,  in  merchandising,  in  manufacturing,  in 
finance,  in  transportation  by  land  as  well  as  by  sea. 
It  is  so  with  banks.  Many  banks  are  really  the  prop- 
erty of  a  few  business  men.  These  soon  become  the 
leading  banks,  and  their  shares  are  invariably  quoted 
at  the  highest  premium,  especially  if  the  president  of 
the  bank  be  the  largest  owner,  as  he  is  in  many  of  the 
most  remarkable  cases  of  success.  In  such  partner- 
ship corporations  there  is  every  opportunity  for  the 
coming  business  man  to  obtain  ownership  which  exists 
in  pure  partnerships,  for  the  owners  of  both 
manage  affairs  and  are  on  the  constant  watch  for 
ability. 

Do  not  be  fastidious;  take  what  the  gods  offer. 
Begin,  if  necessary,  with  a  corporation,  always  keep- 
ing your  eye  open  for  a  chance  to  become  interested  in 
a  business  of  your  own.  Remember  every  business 
can  be  made  successful,  because  it  supplies  some  es- 
sential want  of  the  community;  it  performs  a  needed 
office,  whether  it  be  in  manufacturing  which  produces 
an  article,  or  in  gathering  and  distributing  it  by  the 
merchant;  or  the  banker,  whose  business  is  to  take 
care  of  and  invest  capital. 

There  is  no  line  of  business  in  which  success  is  not 
attainable. 


BUSINESS  205 

A    SECRET    OF    SUCCESS 

It  is  a  simple  matter  of  honest  work,  ability,  and 
concentration.  There  is  no  question  about  there  be- 
ing room  at  the  top  for  exceptional  men  in  any  pro- 
fession. These  have  not  to  seek  patronage;  the  ques- 
tion is,  rather,  how  can  their  services  be  secured,  and, 
as  with  every  profession,  so  in  every  line  of  business, 
there  is  plenty  of  room  at  the  top.  Your  problem  is 
,  how  to  get  there.  The  answer  is  simple:  conduct  your 
business  with  just  a  little  more  ability  than  the  average 
man  in  your  line.  If  you  are  only  above  the  average 
your  success  is  secured,  and  the  degree  of  success  is  in 
ratio  to  the  greater  degree  of  ability  and  attention 
which  you  give  above  the  average.  There  are  always 
a  few  in  business  who  stand  near  the  top,  but,  there 
are  always  an  infinitely  greater  number  at  and  near 
the  bottom.  And  should  you  fail  to  ascend,  the  fault 
is  not  in  your  stars,  but  in  yourselves.  Those  who  fail 
may  say  that  this  or  that  man  had  great  advantages, 
the  fates  were  propitious,  the  conditions  favourable. 
Now,  there  is  very  little  in  this ;  one  man  lands  in  the 
middle  of  a  stream  which  he  tries  to  jump,  and  is  swept 
away,  and  another  tries  the  same  feat,  and  lands  upon 
the  other  side. 

Examine  these  two  men. 

You  will  find  that  the  one  who  failed,  lacked  judg- 
ment; he  had  not  calculated  the  means  to  the  end; 
was  a  fooHsh  fellow;  had  not  trained  himself;  could 


2o6  THE   EMPIRE   OF    BUSINESS 

not  jump ;  he  took  the  chances.  He  was  Hke  the  young 
lady  who  was  asked  if  she  could  play  the  violin,  she 
said  she  "did  not  know,  she  had  never  tried."  Now, 
the  other  man  who  jumped  the  stream  had  carefully 
trained  himself;  he  knew  about  how  far  he  could  jump, 
and  there  was  one  thing  "dead  sure"  with  him,  he 
knew  he  could,  at  any  rate,  jump  far  enough  to  land  at 
a  point  from  which  he  could  wade  ashore,  and  try 
again.     He  had  shown  judgment. 

Prestige  is  a  great  matter,  my  friends.  A  yoimg 
man  who  has  the  record  of  doing  what  he  sets  out  to 
do  will  find  year  after  year  his  field  of  operations  ex- 
tended, and  the  tasks  committed  to  him  greater  and 
greater.  On  the  other  hand,  the  man  who  has  to  admit 
failure  and  comes  to  friends  trying  to  get  assistance 
in  order  to  make  a  second  start  is  in  a  very  bad  posi- 
tion, indeed. 

COLLEGE    GRADUATES    IN    BUSINESS 

The  graduates  of  our  colleges  and  imiversities  in 
former  years  graduated  while  yet  in  their  teens.  We 
have  changed  this,  and  graduates  are  older,  as  a  rule, 
when  they  enter  upon  life's  struggle,  but  they  are 
taught  much  more.  Unless  the  yotmg  university  man 
employs  his  time  to  the  very  best  advantage  in  ac- 
quiring knowledge  upon  the  pursuit  which  he  is  to 
make  the  chief  business  of  his  life,  he  will  enter  business 
at  a  disadvantage  with  younger  men  who  enter  in  their 


BUSINESS  207 

teens,  although  lacking  in  university  education.  This 
goes  without  saying.  Now,  the  question  is :  Will  the 
graduate  who  has  dwelt  in  the  region  of  theory  over- 
take the  man  who  has  been  for  a  year  or  two  in  ad- 
vance of  him,  engaged  in  the  hard  and  stem  educative 
field  of  practice. 

That  it  is  possible  for  the  graduate  to  do  so  also 
goes  without  saying,  and  that  he  should  in  after  life 
possess  views  broader  than  the  ordinary  business 
man,  deprived  of  university  education,  is  also  certain, 
and,  of  course,  the  race  in  life  is  to  those  whose  record 
is  best  at  the  end ;  the  beginning  is  forgotten  and  is  of 
no  moment.  But  if  the  graduate  is  ever  to  overtake 
the  first  starter  in  the  race,  it  must  be  by  possessing 
stronger  staying-powers;  his  superior  knowledge  lead- 
ing to  sounder  judgment  must  be  depended  upon  to 
win  the  race  at  the  finish.  A  few  disadvantages  he 
must  strenuously  guard  against,  the  lack  of  severe 
self -discipline,  of  strenuous  concentration,  and  in- 
tense ambition,  which  usually  characterizes  the  man 
who  starts  before  the  habits  of  manhood  are  formed. 
The  habits  of  the  young  man  at  college,  after  he  is  a 
man,  and  the  habits  of  the  youngster  in  the  business 
arena  are  likely  to  differ. 

There  is  another  great  disadvantage  which  the  older 
man  has  to  overcome  in  most  successful  business  cs- 
tabhshments.  There  will  be  found  in  operation  there 
a   strict  civil-service   system  and   promotion   without 


2o8  THE   EMPIRE   OF    BUSINESS 

favour.  It  is,  therefore,  most  difficult  to  find  admis- 
sion to  the  service  in  any  but  the  lowest  grades.  One 
has  to  begin  at  the  foot,  and  this  is  better  for  all  parties 
concerned,  especially  the  young  graduate. 

The  exceptional  graduate  should  excel  the  ex- 
ceptional non-graduate.  He  has  more  education, 
and  education  will  always  tell,  the  other  qualities  be- 
ing equal.  Take  two  men  of  equal  natural  ability, 
energy,  and  the  same  ambition  and  characteristics,  and 
the  man  who  has  received  the  best,  widest,  most  suit- 
able education  has  the  advantage  over  the  other, 
undoubtedly. 

BUSINESS   MEN   AND   SPECULATORS 

All  pure  coins  have  their  counterfeits;  the  counter- 
feit of  business  is  speculation.  A  man  in  business 
always  gives  value  in  return  for  his  revenue,  and  thus 
performs  a  useful  function.  His  services  are  necessary 
and  benefit  the  community ;  besides,  he  labours  steadily 
in  developing  the  resources  of  the  country,  and  thus 
contributes  to  the  advancements  of  the  race.  This 
is  genuine  coin.  Speculation,  on  the  contrary,  is  a 
parasite  fastened  upon  the  labour  of  business  men. 
It  creates  nothing  and  supplies  no  want.  When  the 
speculator  wins  he  takes  money  without  rendering 
service,  or  giving  value  therefor,  and  when  he  loses, 
his  fellow-speculator  takes  the  money  from  him.  It 
is  a  pure  gambling  operation  between  them,  degrad- 


BUSINESS  209 

ing  to  both.  You  can  never  be  an  honest  man  of 
business  and  a  speculator.  The  modes  and  aims  of 
the  one  career  are  fatal  to  the  other.  No  business  man 
can  honestly  speculate,  for  those  who  trust  him  have 
a  right  to  expect  strict  adherence  to  business  methods. 
The  creditor  takes  the  usual  risks  of  business,  but 
not  those  of  speculation.  The  genuine  and  the  coun- 
terfeit have  nothing  in  common. 

That  95  per  cent,  fail  of  those  who  start  in  business 
upon  their  own  account  seems  incredible,  and  yet 
such  are  said  to  be  the  statistics  upon  the  subject. 
Although  it  is  said  that  figures  will  say  anything,  still 
it  is  a  fact  that  the  proportion  is  very  great.  Do  not 
think  that  I  wish  to  discourage  you  against  attempt- 
ing to  be  your  own  masters  and  having  a  business  of 
your  own;  very  far  from  it.  Besides,  the  coming 
business  man  is  not  to  be  discouraged  by  anything 
that  anybody  can  say.  He  is  a  true  knight  who  says 
with  Fitzjames: 

If  the  path  be  dangerous  known, 
The  danger  self  is  lure  alone. 

The  young  man  who  is  determined  to  be  a  business 
man  will  not  be  thwarted,  neither  will  he  be  diverted 
into  any  other  channel,  and  he  is  going  to  start  and 
have  a  trial;  he  will  "make  a  spoon  or  spoil  a  horn" 
trying  to  make  it.  He  must  go  ahead  and  find  it  out. 
Time  enough  to  confine  yourself  to  a  life-long  bondage 


2IO  THE    EMPIRE   OF    BUSINESS 

as  mere  receivers  of  a  salary  after  you  have  tried 
business,  and  really  discovered  whether  or  no  you  are 
one  of  the  gifted  who  possess  all  the  necessary  quali- 
ties. 

I  have  tried  to  sketch  the  path  of  the  exceptional 
graduate  from  salary  to  partnership.  It  is  no  fancy 
sketch;  there  is  not  a  day  passes  without  changes  in 
many  firms  which  raise  young  men  to  partnership, 
and  in  every  single  city  no  first  of  January  passes 
without  such  promotions.  Business  requires  fresh 
young  blood  for  its  existence.  If  any  of  you  are  dis- 
couraged upon  this  point,  let  me  give  you  two  stories 
within  my  own  experience,  which  should  certainly 
cheer  you. 

A  SKETCH   FROM  LIFE 

There  is  a  large  manufacturer,  the  largest  in  the 
world  in  his  line.  I  know  him  well,  a  splendid  man, 
who  illustrates  the  business  career  at  its  best.  Now, 
like  all  sensible  business  men,  as  he  grew  in  years  he 
realized  that  fresh  blood  must  be  introduced  into  his 
business;  that  while  it  was  comparatively  easy  for 
him  to  manage  the  extensive  business  at  present,  it 
was  wise  to  provide  for  its  continuance  in  able  hands 
after  he  had  retired.  Rich  men  seldom  have  sons 
who  inherit  a  taste  for  business.  I  am  not  concerned 
to  say  whether  this  is  well  or  otherwise.  Looking  at 
the  human  race  as  a  whole,  I  believe  it  is  for  good. 


BUSINESS  211 

If  rich  men's  sons  had  poor  men's  necessities,  and, 
hence  their  ambitious  abiHties,  there  would  be  less 
chance  for  the  students  of  colleges  than  there  is.  It 
was  not  to  any  member  of  his  family  that  this  man 
looked  for  the  new  young  blood.  A  young  man  in 
the  service  of  a  corporation  had  attracted  his  atten- 
tion in  the  management  of  certain  business  matters 
connected  with  the  firm.  The  young  man  had  to 
call  upon  this  gentleman  frequently.  The  wise  man 
did  not  move  hastily  in  the  matter.  About  his  ability 
he  was  soon  satisfied,  but  that  covered  only  one  point 
of  many.  What  were  the  young  man's  surroundings, 
habits,  tastes,  acquirements  ?  Beyond  his  immediate 
business,  what  was  his  nature?  He  found  everything 
in  these  matters  just  as  he  would  have  it.  The  young 
man  was  supporting  a  widowed  mother  and  a  sister; 
he  had  as  friends  some  excellent  young  men,  and 
some  older  than  himself;  he  was  a  student;  he  was  a 
reader;  had  high  tastes,  of  course;  I  need  hardly  say 
that  he  was  a  young  gentleman,  highly  self-respecting, 
the  soul  of  honour,  incapable  of  anything  low  or  vulgar ; 
in  short,  a  model  young  man,  and  of  course,  poor — 
that  goes  without  saying. 

The  young  man  was  sent  for,  and  the  millionnaire 
told  him  that  he  should  like  very  much  to  try  him  in 
his  service,  and  asked  the  young  man  if  he  would  make 
the  trial.  The  millionnaire  stated  frankly  what  he 
was  looking  for — a   young  business  man  who  might 


212  THE   EMPIRE   OF    BUSINESS 

develop,  and  finally  relieve  him  of  much  care.  The 
arrangement  was  that  he  should  come  for  two  years 
as  a  clerk,  subject  to  clerk's  rules,  which  in  this  case 
was  very  hard,  because  he  had  to  be  at  the  factory  a 
few  minutes  before  seven  in  the  morning.  He  was 
to  have  a  salary  somewhat  larger  than  he  had  received, 
and,  if  at  the  end  of  two  years  nothing  had  been  said 
on  either  side,  no  obligations  were  weaved,  each  was 
free.  He  was  simply  on  trial.  The  young  man 
proudly  said  he  would  not  have  it  otherwise. 

The  business  went  on.  Before  the  two  years  ex- 
pired the  employer  was  satisfied  that  he  had  found 
that  exceedingly  rare  thing,  a  young  business  man. 
What  a  number  of  qualities  this  embraces,  including 
judgment,  for  without  judgment  a  business  man 
amounts  to  nothing.  The  employer  stated  to  the 
young  man  that  he  was  delighted  with  him,  pleased 
with  his  services,  and  expressed  his  joy  at  having 
found  him.  He  had  now  arranged  to  interest  him  in  the 
firm.     But  to  his  amazement  the  young  man  replied : 

"Thanks,  thanks,  but  it  is  impossible  for  me  to  ac- 
cept." 

"What  is  the  matter?  You  suit  me;  do  I  not  suit 
you?" 

"Excuse  me,  sir,  but  for  reasons  which  I  cannot 
explain,  I  am  to  leave  your  service  in  six  months, 
when  my  two  years  are  up,  and  I  intended  to  give  you 
notice  of  this,  that  you  might  fill  my  place." 


BUSINESS  213 

"Where  are  you  going?" 

"  I  am  going  abroad." 

"Have  you  made  any  engagement?" 

"No,  sir." 

"  Do  you  not  know  where  you  are  going  ?" 

"No,  sir." 

"  Nor  what  you  are  to  do  ? " 

"No,  sir." 

"Sir,  I  have  treated  you  well,  and  I  do  think  I  am 
entitled  to  know  the  real  reason.  I  think  it  is  your 
duty  to  tell  me." 

The  reason  was  dragged  out  of  the  young  man 
"You  have  been  too  good  to  me.  I  would  give  any- 
thing to  be  able  to  remain  with  you.  You  even  in- 
vited me  to  your  house ;  you  have  been  absent  travel- 
ling ;  you  asked  me  to  call  often  to  take  your  wife  and 
daughter  to  such  entertainments  as  they  wished  to 
attend,  and  I  cannot  stand  it  any  longer." 

Well,  the  millionnaire,  of  course,  discovered  what 
all  of  you  have  suspected,  just  what  you  would  have 
done  under  the  circumstances;  he  had  fallen  in  love 
with  the  daughter.  Now  in  this  country  that  would 
not  have  been  considered  much  of  an  indiscretion, 
and  I  do  not  advise  any  of  you  to  fight  much  against 
it.  If  you  really  love,  you  should  overlook  the  ob- 
jection that  it  is  your  employer's  daughter  who  has 
conquered,  and  that  you  may  have  to  bear  the  burden 
of  riches;  but  in  the  land  of  which  I  speak  it  would 


214  THE    EMPIRE   OF    BUSINESS 

have  been  considered  dishonourable  for  a  young  clerk 
to  make  love  to  any  young  lady  without  the  parents' 
permission. 

"Have  you  spoken  to  my  daughter?"  was  the 
question.  The  young  man  scarcely  deigned  to  reply 
to  that. 

"Of  course  not. " 

"Never  said  a  word,  or  led  her  to  suspect  in  any 
way?" 

"Of  course  not." 

"Well,"  he  said,  "  I  do  not  see  why  you  should  not; 
you  are  the  very  kind  of  son-in-law  I  want  if  you  can 
win  my  daughter." 

Very  strange,  but  somehow  or  other,  the  young  lady 
did  not  differ  from  papa;  he  was  the  kind  of  husband 
she  wanted.  Now  that  young  man  is  a  happy  busi- 
ness man  to-day. 

ROMANCE  IN   BUSINESS 

I  have  another  story  which  happened  in  another 
coimtry.  Both  the  fathers-in-law  told  me  these  stories 
themselves,  and  proud  men  they  are,  and  proud  am  I 
of  their  friendship.  You  see  business  is  not  all  this 
hard  prosaic  life  that  it  is  pictured.  It  bears  romance 
and  sentiment  in  it,  and  the  greater  the  business,  the 
more  successful,  the  more  useful,  in  my  experience, 
there  is  found  more  romance  and  imagination.  The 
highest  triumphs  even  in  business  flow  from  romance, 


BUSINESS  215 

sentiment,   imagination,   particularly  in   the  business 
of  a  world-wide  firm. 

The  other  story  is  so  similar  to  the  first  that  success- 
ful telling  is  impossible.  You  will  all  jump  to  the  con- 
clusion, and  the  details  in  these  cases  are  nothing.  It 
is  as  when  I  began  to  tell  my  young  nephews  about  the 
battle  of  Bannockbum;  there  were  the  English,  and 
there  stood  the  Scotch. 

"Which  whipped,  uncle?"  cried  the  three  at  once — 
details  unnecessary.  But  there  was  no  battle  in  this 
case.  I  infer  it  was  all  settled  by  amicable  arbitra- 
tion. 

I  shall  not  tell  it  at  length,  as  I  did  the  other,  but  it 
is  precisely  the  same,  except  that  the  young  man  in 
this  other  case  was  not  employed  except  in  the  ordi- 
nary manner.  The  young  man's  services  were  needed, 
and  he  was  employed.  He  finally  became  private 
secretary  to  the  millionnaire,  and  with  equally  fatal 
results.  In  this  case,  however,  the  father  asked  this 
exemplary  and  able  young  man  to  look  after  his  sons 
during  his  absence.  This  necessitated  visits  to  the 
residence  at  the  country  house,  and  sports  and  games 
with  the  sons.  My  friend  forgot  he  had  a  daughter, 
and  he  should  not  have  done  this.  When  you  become 
not  only  heads  of  business  but  heads  of  families,  you 
should  make  a  note  of  this,  and  not  think  your  sons 
everything.  The  private  secretary,  who  was  requested 
to  attend  to  the  sons,  somehow  or  other,  getting  his  in- 


2i6  THE   EMPIRE   OF   BUSINESS 

structions  verbally,  seems  to  have  understood  them 
as  having  a  slightly  wider  range.  The  daughter  ap- 
parently needed  most  of  his  attention.  But  note  this: 
These  two  young  men  won  the  confidence  and  cap- 
tured the  judgment  and  admiration  of  their  employers 
— business  men — first,  and  then  fell  in  love  with  the 
daughters.  You  will  be  perfectly  safe  if  you  take 
matters  in  the  same  order  of  precedence. 

VALUE  OF  A  BUSINESS  CAREER 

Perhaps,  I  may  be  permitted,  without  going  too  far 
beyond  the  scope  of  my  text,  to  make  a  few  remarks 
upon  the  influence  of  a  business  career  upon  men,  as 
compared  with  other  pursuits. 

First,  then,  I  have  learned  that  the  artistic  career  is 
most  narrowing,  and  produces  such  petty  jealousies, 
unbounded  vanities,  and  spitefulness,  as  to  furnish  me 
with  a  great  contrast  to  that  which  I  have  found  in 
men  of  affairs.  Music,  painting,  sculpture,  one  would 
think,  should  prove  most  powerful  in  their  beneficent 
effects  upon  those  who  labour  with  them  as  their  daily 
vocation.  Experience,  however,  is  against  this.  Per- 
haps, because  the  work,  or  the  performance,  of  artists 
is  so  highly  personal,  so  clearly  seen,  being  brought 
directly  before  the  public,  that  petty  passions  are 
stimulated ;  however  that  may  be,  I  believe  it  will  not 
be  controverted  that  the  artistic  mind  becomes  preju- 
diced and  narrow.     But,  understand,  I  speak  only  of 


BUSINESS  217 

classes  and  of  the  general  effect;  evenyrwhere  we  find 
exceptions  which  render  the  average  still  more  unsatis- 
factory. In  regard  to  what  are  called  the  learned 
professions,  we  notice  the  effect  produced  by  speciali- 
zation in  a  very  marked  degree. 

In  the  ministerial  class  this  is  not  so  marked  in  our 
day,  because  leaders  in  that  great  function  permit 
themselves  a  wider  range  of  subjects  than  ever  before, 
and  are  dealing  less  with  creeds  and  formulas  and  more 
and  more  with  the  practical  evils  and  shortcomings  of 
human  life  in  its  various  phases.  This  naturally 
broadens  the  mind.  It  has  been  held  that  the  legal 
profession  must  tend  to  make  clear,  but  narrow,  in- 
tellects, and  it  is  pointed  out  that  great  lawyers  have 
seldom  arisen  to  commanding  position  and  power 
over  their  fellows.  This  does  not  mean  that  men  who 
study  law  become  unsatisfactory  legislators  or  states- 
men and  rulers.  If  it  did,  our  country,  of  all  others, 
should  be  in  a  bad  way,  because  we  are  governed  by 
lawyers.  But  the  most  famous  Americans  who  have 
been  great  men,  were  not  great  lawyers;  that  is,  they 
have  seldom  attained  the  foremost  rank  in  the  pro- 
fession, but  have  availed  themselves  of  the  inestimable 
advantage  which  the  study  of  law  confers  upon  a  states- 
man, and  developed  beyond  the  bounds  of  the  pro- 
fession. We  are  reminded  that  the  great  lawyer  and 
the  great  judge  must  deal  with  rules  and  precedents 
already  established ;  the  lawyer  follows  precedents, 
but  the  ruler  of  men  makes  precedents. 


2i8  THE   EMPIRE   OF    BUSINESS 

MERCHANTS  AND  PROFESSIONAL  MEN 

The  tendency  of  all  professions,  it  would  seem,  must 
be  to  make  what  is  known  as  the  professional  mind 
clear,  but  narrow.  Now  what  may  be  claimed  for 
business  as  a  career  is  that  the  man  in  business  is 
called  upon  to  deal  with  an  ever-changing  variety  of 
questions.  He  must  have  an  all-round  judgment 
based  upon  knowledge  of  many  subjects.  It  is  not 
sufficient  for  the  great  merchant  and  business  man 
of  our  day  that  he  know  his  country  well,  its  physical 
conditions,  its  resources,  statistics,  crops,  waterways, 
its  finances,  in  short,  all  conditions  which  affect  not 
only  the  present,  but  which  give  him  data  upon  which 
he  can  predict,  with  some  degree  of  certainty,  the 
future. 

The  merchant  whose  operations  extend  to  various 
countries  must  also  know  these  countries,  and  also  the 
chief  things  pertaining  to  them.  His  view  must  be 
world-wide ;  nothing  can  happen  of  moment  which  had 
not  its  bearing  upon  his  action — political  complica- 
tions at  Constantinople ;  the  appearance  of  the  cholera 
in  the  East;  monsoon  in  India;  the  supply  of  gold  at 
Cripple  Creek;  the  appearance  of  the  Colorado  beetles 
or  the  fall  of  a  ministry ;  the  danger  of  war ;  the  likeli- 
hood of  arbitration  compelling  settlement — nothing 
can  happen  in  any  part  of  the  world  which  he  has  not 
to  consider.  He  must  possess  one  of  the  rarest  qual- 
ities— be  an  excellent  judge  of  men — he  often  employs 


BUSINESS  219 

thousands,  and  knows  how  to  bring  the  best  out  of 
various  characters;  he  must  have  the  gift  of  organiza- 
tion— another  rare  gift — must  have  executive  ability; 
must  be  able  to  decide  promptly  and  wisely. 

Now,  none  of  these  rare  qualities  are  so  absolutely 
essential  to  the  specialist  in  any  branch  or  profession. 
He  follows  a  career,  therefore,  which  tends  not  only 
to  sharpen  his  wits,  but  to  enlarge  his  powers;  differ- 
ent, also,  from  any  other  careers,  that  it  tends  not  to 
specialization  and  the  working  of  the  mind  within 
narrow  grooves,  but  tends  to  develop  in  a  man  capacity 
to  judge  upon  wide  data.  No  professional  life  em- 
braces so  many  problems,  none  other  requires  so  wide 
a  view  of  affairs  in  general.  I  think,  therefore,  that 
it  may  justly  be  said,  for  the  business  career,  that  it 
must  widen  and  develop  the  intellectual  powers  of  its 
devotee. 

On  the  other  hand,  the  professional  career  is  im- 
measurably nobler  in  this:  that  it  has  not  for  its  chief 
end  the  ignoble  aim  of  money-making  and  is  free 
from  the  gravest  danger  which  besets  the  career  of 
business,  which  is  in  one  sense  the  most  sordid  of  all 
careers  if  entered  upon  in  the  wrong  spirit.  To  make 
money  is  no  doubt  the  primary  consideration  with 
most  young  men  who  enter  it.  I  think  if  you  will  look 
into  your  hearts  you  will  find  this  to  be  true.  But 
while  this  may  be  the  first,  it  should  not  be  the  last 
consideration. 


220  THE    EMPIRE   OF    BUSINESS 

There  is  the  great  use  which  a  man  can  perform  in 
developing  the  resources  of  his  country;  in  furnishing 
employment  to  thousands;  in  developing  inventions 
which  prove  of  great  benefit  to  the  race,  and  help  it 
forward.  The  successful  man  of  affairs  soon  rises 
above  the  mere  desire  to  make  money  as  the  chief  end 
of  his  labours;  that  is  superseded  by  thoughts  of  the 
uses  he  performs  in  the  line  which  I  have  just  men- 
tioned. The  merchant  soon  finds  his  strongest  feel- 
ing to  be  that  of  pride  in  the  extent  of  his  international 
operations;  in  his  ships  sailing  every  sea.  The  manu- 
facturer finds  in  his  employees,  and  in  his  works,  in 
machinery,  in  improvements,  in  the  perfection  of  his 
factories  and  methods  his  chief  interest  and  reward. 
The  profitable  return  they  make  is  chiefly  acceptable 
not  because  this  is  mere  money,  but  because  it  denotes 
success. 

There  is  a  romantic  as  well  as  prosaic  side  to  busi- 
ness. The  young  man  who  begins  in  a  financial  firm 
and  deals  with  capital  invested  in  a  hundred  different 
ways — in  bonds  upon  our  railway  systems,  in  money 
lent  to  the  merchant  and  to  the  manufacturer  to  en- 
able them  to  work  their  wonders — soon  finds  romance 
in  business  and  unlimited  room  for  the  imagination. 
He  can  furnish  credit  world-wide  in  its  range.  His 
simple  letter  will  carry  the  traveller  to  the  farthest 
part  of  the  earth.  He  may  even  be  of  service  to  his 
country  in  a  crisis,  as  Richard  Morris,  the  great  mer- 


BUSINESS  221 

chant  in  Philadelphia,  was  to  Greneral  Washington  in 
the  Revolutionary  Cause,  or,  as  in  our  own  day,  our 
great  bankers  have  been  in  providing  gold  to  our 
Government  at  several  crises  to  avert  calamity, 

THE  VANISHED    PREJUDICE  AGAINST  TRADE 

If  the  young  man  does  not  find  romance  in  his  busi- 
ness, it  is  not  the  fault  of  the  business,  but  the  fault 
of  the  young  man.  Consider  the  wonders,  the  mys- 
teries connected  with  the  recent  developments  in  that 
most  spiritual  of  all  agents — electricity — with  its  un- 
known, and,  perhaps,  even  unguessed  of  powers.  He 
must  be  a  dull  and  prosaic  young  man  who,  being  con- 
nected with  electricity  in  any  of  its  forms,  is  not  lifted 
from  humdrum  business  to  the  region  of  the  mysteri- 
ous. Business  is  not  all  dollars;  these  are  but  the 
shell — the  kernel  lies  within  and  is  to  be  enjoyed  later, 
as  the  higher  faculties  of  the  business  man,  so  con- 
stantly called  into  play,  develop  and  mature.  There 
was  in  the  reign  of  militarism  and  barbarous  force 
much  contempt  for  the  man  engaged  in  trade.  How 
completely  has  all  this  changed !  But,  indeed,  the 
feeling  was  of  recent  origin,  for  if  we  look  further  back 
we  find  the  oldest  families  in  the  world  proud  of  noth- 
ing but  the  part  they  played  in  business.  The  wool- 
sack and  the  galley  still  flourish  in  their  coat-of-arms. 
One  of  the  most — perhaps  the  most — influential  states- 
man in  England  to-day  is  the   Duke  of  Devonshire, 


222  THE   EMPIRE   OF    BUSINESS 

because  he  has  the  confidence  of  both  parties.  He  is 
the  president  of  the  Barrow  Steel  Company.  The 
members  of  the  present  Conservative  cabinet  were 
found  to  hold  sixty  four  directorships  in  various  trad- 
ing, manufacturing,  and  mining  companies.  In  Brit- 
ain to-day  not  how  to  keep  out  of  trade,  but  how  to 
get  in  it,  is  the  question.  The  President  of  the  French 
Republic,  a  man  with  a  marvellous  career,  has  been  a 
business  man  all  his  days.  The  old  feeling  of  aver- 
sion has  entirely  gone. 

You  remember  that  the  late  Emperor  of  Germany 
wished  to  make  his  friend,  the  steel  manufacturer, 
Krupp,  a  Prince  of  the  empire,  but  that  business  man 
was  too  proud  of  his  works,  and  the  son  of  his  father, 
and  begged  the  Emperor  to  excuse  him  from  degrad- 
ing the  rank  he  at  present  held  as  King  of  Steel.  Herr 
Krupp's  son,  who  has  now  succeeded  to  his  father's 
throne,  I  doubt  not,  would  make  the  same  reply  to- 
day. At  present  he  is  a  monarch  equal  to  his  Em- 
peror, and  from  all  I  know  of  the  young  King  Krupp, 
just  as  proud  of  his  position. 

The  old  prejudice  against  trade  has  gone  even  from 
the  strongholds  in  Europe.  This  change  has  come 
because  trade  itself  has  changed.  In  old  days  every 
branch  of  business  was  conducted  upon  the  smallest 
retail  scale,  and  small  dealings  in  small  affairs  breed 
small  men ;  besides,  every  man  had  to  be  occupied  with 


BUSINESS  223 

the  details,  and,  indeed,  each  man  manufactured  or 
traded  for  himself.  The  higher  qualities  of  organiza- 
tion and  of  enterprise,  of  broad  views  and  of  executive 
ability,  were  not  brought  into  play.  In  our  day, 
business  in  all  branches  is  conducted  upon  so  gigantic 
a  scale  that  partners  of  a  huge  concern  are  rulers  over 
a  domain.  The  large  employer  of  labour  sometimes 
has  more  men  in  his  industrial  army  than  the  petty 
German  kings  had  under  their  banners. 

It  was  said  of  old  that  two  of  a  trade  never  agree; 
to-day  the  warmest  friendships  are  formed  in  every 
department  of  human  effort  among  those  in  the  same 
business;  each  visits  the  other's  counting-house, 
factory,  warehouse;  and  are  shown  the  different 
methods;  all  the  improvements;  new  inventions,  and 
freely  adapt  them  to  their  own  business. 

Affairs  are  now  too  great  to  breed  petty  jealousies, 
and  there  is  now  allied  with  the  desire  for  gain  the 
desire  for  progress,  invention,  improved  methods, 
scientific  development,  and  pride  of  success  in  these 
important  matters;  so  that  the  dividend  which  the 
business  man  seeks  and  receives  to-day,  is  not  alone 
in  dollars.  He  receives  with  the  dollar  something 
better,  a  dividend  in  the  shape  of  satisfaction  in  being 
instrumental  in  carrying  forward  to  higher  stages  of 
development  the  business  which  he  makes  his  life- 
work. 


224  THE    EMPIRE   OF   BUSINESS 

REWARDS    OF   A    BUSINESS    CAREER 

I  can  confidently  recommend  to  you  the  business 
career  as  one  in  which  there  is  abundant  room  for  the 
exercise  of  man's  highest  power,  and  of  every  good 
quahty  in  human  nature.  I  beheve  the  career  of  the 
great  merchant,  or  banker,  or  captain  of  industry,  to 
be  favourable  to  the  development  of  the  powers  of  the 
mind,  and  to  the  ripening  of  the  judgment  upon  a  wide 
range  of  general  subjects ;  to  freedom  from  prejudice, 
and  the  keeping  of  an  open  mind.  And  I  do  know 
that  permanent  success  is  not  obtainable  except  by 
fair  and  honourable  dealing,  by  irreproachable  habits 
and  correct  living,  by  the  display  of  good  sense  and 
rare  judgment  in  all  the  relations  of  human  life,  for 
credit  and  confidence  fly  from  the  business  man,  fool- 
ish in  word  and  deed,  or  irregular  in  habits,  or  even 
suspected  of  sharp  practice.  There  may  be  room  for 
a  foolish  man  in  every  profession — foolish  as  a  child 
beyond  the  range  of  his  specialty,  and  yet  successful 
in  that — ^but  no  man  ever  saw  a  foolish  business  man 
successful.  If  without  sound,  all-round  judgment, 
he  must  fail. 

The  business  career  is  thus  a  stem  school  of  all  the 
virtues,  and  there  is  one  supreme  reward  which  it  often 
yields  which  no  other  career  can  promise;  I  point  to 
noble  benefactions  which  it  renders  possible.  It  is  to 
business  men  following  business  careers  that  we  chiefly 
owe   our  universities,   colleges,   libraries,   and   educa- 


BUSINESS  225 

tional  institutions,  as  witness  Girard,  Lehigh,  Chicago, 
Harvard,  Yale,  Cornell,  and  many  others. 

What  monument  can  a  man  leave  behind  him  pro- 
ductive of  so  much  good,  and  so  certain  to  hand  his 
name  down  to  succeeding  generations,  hallowed  with 
the  blessings  of  thousands  in  each  decade  who  have 
within  its  walls  received  that  most  precious  posses- 
sion, a  soiind  and  liberal  education  ?  These  are  the 
works  of  men  who  recognized  that  surplus  wealth  was 
a  sacred  trust,  to  be  administered  during  the  life  of 
its  possessor  for  the  highest  good  of  his  fellows. 

If,  then,  some  business  men  may  fall  subject  to  the 
reproach  of  grasping,  we  can  justly  claim  for  them  as  a 
class  what  honest  Thomas  Cromwell  claimed  for  the 
great  cardinal,  and  say:  "If  they  have  a  greed  of 
getting,  yet  in  bestowing  they  are  most  princely,  as 
witness  these  seats  of  learning." 


Steel  Manufacture  in  the  United 

States  in  the  Nineteenth 

Century 

Some  reasons  why  the  United  States  has  become  the 
greatest  steel-producing  country  in  the  world.  Com- 
parative costs  of  raw  material  and  manufacture  of 
steel  in  this  country  and  abroad. 


STEEL    MANUFACTURE     IN    THE 

UNITED     STATES     IN     THE 

NINETEENTH  CENTURY 

TO  write  of  the  manufacture  of  steel  in  the 
United  States  during  the  last  century  is  in- 
deed to  begin  at  the  beginning.  From  Mr.  Swank's 
standard  work,  "Iron  in  All  Ages,"  we  learn  that  the 
Legislature  of  Pennsylvania  as  late  as  1786  lent  Mr. 
Humphreys  ;j<^3oo  for  five  years  to  enable  him  to  try 
to  make  bar  iron  into  steel  "as  good  as  in  England." 
As  late  as  18 10  there  were  produced  in  the  whole 
country  only  917  tons  of  steel,  Pennsylvania's  share 
being  531  tons,  or  more  than  half  of  the  whole.  It  is 
remarkable  that  the  good  old  Keystone  State  still 
makes  about  the  same  percentage.  Even  in  1831 
the  production  of  steel  was  only  1,600  tons,  an  amount 
which  was  said  then  to  equal  the  whole  amount  im- 
ported, so  that  the  market  for  steel  was  divided  equally 
with  the  foreigner  seventy  years  ago.  But  this  steel 
was  made  chiefly  by  cementation ;  crucible  steel  was 
to  come  later.  From  1831  until  as  late  as  i860  little 
progress  was  made  in  developing  the  manufacture  of 
steel,  for  the  total  product  in  Pennsylvania  in   1850 

From   the    Review  of  the   Century   number  of   the  New  York 
Evening  Puit,  January    12,    i(;oi 

229 


230  THE    EMPIRE   OF    BUSINESS 

was  only  6,000  tons,  still  principally  blister  steel.  In 
1840  Isaac  Jones  and  William  Coleman  began  its  man- 
ufacture in  Pittsburg  and  succeeded.  In  1853  Singer, 
Nimick  &  Co.  produced  successfully  the  usual  grades 
of  cast  steel  for  saws,  machinery,  etc.,  and  for  kindred 
purposes  Hussey,  Wells  &  Co.  in  i860  made  out  of 
American  iron  crucible  steel  of  first  quality  as  a  regular 
product,  and  in  1862  came  Park  Brother  &  Co.,  with 
the  biggest  crucible  steel  plant  of  all  up  to  that  time, 
and  several  hundred  English  workmen  were  imported 
to  insure  success.  This  firm  also  used  American 
iron.     All  these  concerns  were  in  Pittsburg. 

Henceforth  the  struggle  with  foreign  steel  became 
severe  until  the  invader  was  finally  driven  from  the 
field.  At  first  European  makers  could  "dump  their 
surplus"  upon  the  market  and  force  American  makers 
to  accept  for  their  entire  output  the  extreme  low  rates 
which  had  only  to  be  taken  by  the  invader  for  a  small 
part  of  his.  The  party  in  control  of  a  profitable 
home  market  can  most  successfully  invade  the  foreign 
markets.  In  recent  years  it  is  the  American 
manufacturer  who  is  "dumping  his  surplus"  in 
foreign  territory.  First  conquer  your  home  mar- 
ket and  the  foreign  market  will  probably  be  added 
to  you  is  the  rule  with  manufactures  in  international 
trade. 

As  I  write  of  Coleman,  Jones,  Nimick,  Singer,  Hus- 
sey, and  Park  I  am  carried  back  to  boyhood,  when  as 


STEEL  MANUFACTURE  IN  THE  U.  S.     231 

a  messenger  boy  in  the  telegraph  office  in  Pittsburg 
I  delivered  to  them  many  a  telegram  and  received 
coveted  recognition  from  these  great  men  of  my  youth. 
Ever}^  one  passed  before  my  eyes  as  I  wrote  his  name 
as  vividly  as  if  I  were  still  in  daily  intercourse  with 
him.  Were  they  in  the  next  room  and  to  speak  I 
could  tell  each  voice  before  the  word  was  ended.  All 
are  gone  except  the  yotmger  brother  Singer,  still  my 
partner  and  friend.  These  are  the  fathers  of  steel  in  the 
United  States.  They  "have  done  the  State  some 
service.  "     Peace  to  their  ashes  ! 

It  was  not  till  1864,  when  the  last  century  was 
almost  two-thirds  gone,  that  the  revolution  in  steel 
manufacture  came  to  us,  and  the  Iron  Age  began  to 
give  way  to  the  new  King  Steel,  for  our  first  Bessemer 
steel  was  made  in  that  notable  year,  and  steel  hitherto 
costing  from  six  to  seven  cents  per  poimd  for  ordinary 
grades  has  since  sold  at  less  than  one  cent  per  pound, 
while  steel  billets  by  the  hundred  thousand  tons  have 
sold  at  "three  pounds  of  steel  for  two  cents."  Into 
this  steel  for  each  pound  enter  two  pounds  of  iron  ore 
mined  and  transported  by  rail  and  water  1,000  miles, 
one  pound  of  coke,  requiring  one  and  one-third  pounds 
of  coal  to  be  mined,  coked,  and  transported  50  miles, 
and  one-third  of  a  pound  of  limestone  quarried  and 
transported  140  miles;  so  that  three  and  a  third  pounds 
of  raw  material  have  been  made  into  one  pound  of 
steel  and  given  to  the  consumer  for  two-thirds  of  one 


232  THE   EMPIRE   OF    BUSINESS 

cent,  three  pounds  for  two  cents  being  $15  for  2,240 
pounds — the  gross  ton. 

Were  the  writer  to  be  asked  how  this  miracle  is  per- 
formed he  could  not  tell,  for  never  can  he  dispel  the 
doubt,  when  he  thinks  of  it,  that  there  must  be  some 
mistake,  and  that  the  concern  which  bestows  this  pre- 
cious metal  upon  an  ungrateful  people  for  such  a 
trifle  must  soon  go  to  the  wall.  So,  indeed,  it  would 
if  this  extremely  low  price  had  to  be  taken  for  any 
length  of  time  or  for  all  forms  of  steel.  There  is  not 
sufficient  profit  to  cover  the  risks  of  business  in  three 
pounds  of  steel  for  two  cents.  Still,  some  of  the  larg- 
est concerns  of  the  United  States,  which  own  all  their 
raw  materials  and  their  own  ships  and  railways  and 
are  properly  equipped  and  managed,  might  reach  this 
as  their  cost  price,  allowing  nothing  for  dividends  or 
for  interest  upon  the  capital  invested.  Interest  ap- 
proaches two  dollars  per  ton  and  in  most  cases  exceeds 
it.  The  risks  of  manufacturing,  accidents  and  renewals, 
and  of  sales  should  be  rated  at  two  dollars  per  ton. 

This  low  cost  was  made  possible  by  the  invention  of 
Sir  Henry  Bessemer.  Bessemer  steel  was  enthroned 
as  king,  and  no  monarch  seemed  so  sure  of  a  long  and 
undisputed  reign,  supplemented  as  the  Bessemer  pro- 
cess was  by  the  invention  of  a  young  genius,  my  friend 
Sidney  Gilchrist  Thomas,  who  added  the  basic  pro- 
cess, by  which  impure  ores  could  be  used  in  the  manu- 
facture of  Bessemer  steel. 


STEEL  MANUFACTURE  IN  THE  U.  S.     233 

Various  contributory  causes  have  made  steel  billets 
at  $15  a  ton  possible,  among  which  automatic  ma- 
chinery ranks  first,  and  in  this  the  American  excels; 
continuous  processes  come  second.  Workshops  1,100 
and  1,200  feet  long  are  becoming  common,  in  which 
the  raw  material  enters  at  one  end  and  emerges  fin- 
ished at  the  other  without  handling,  and  often  with- 
out even  stopping  except  for  reheating.  The  writer 
hears  of  plans  to-day  for  new  works  upon  such  a  scale 
that  a  mile  and  a  quarter  of  land  is  required,  one  shop 
alone  being  3,000  feet  in  length.  One  essential  for 
cheap  production  is  magnitude.  Concerns  making 
one  thousand  tons  of  steel  per  day  have  little  chance 
against  one  making  ten.  We  see  this  law  in  all  de- 
partments of  industry.  It  evolves  the  twenty- 
thousand-ton  steamship  and  the  fifty-ton  railroad 
car.  Improved  engines  and  the  use  of  electricity  as 
a  motor,  the  new  loading  and  unloading  machinery, 
are  all  contributory  causes  to  the  cheapening  of  steel. 

There  is  one  element  of  cost,  however,  which  every 
student  of  sociology  will  rejoice  to  know  has  not  been 
cheapened,  and  that  is  human  labour.  It  has  risen 
and  the  tendency  is  to  higher  earnings  per  man.  In 
one  of  the  largest  steel  works  last  year  the  average 
wages  ])er  man,  including  all  the  paid-by-the-day 
labourers,  boys,  and  mechanics,  exceeded  $4  per  day 
for  311  days.  Fewer  men  being  required  the  labour 
cost  per  ton  is  less,  and  contrary  to  the  o])inion  often 


234  THE   EMPIRE   OF    BUSINESS 

expressed  these  men  are  of  higher  quaHty  than  ever 
as  men.  It  is  a  mistake  to  suppose  that  men  are  be- 
coming mere  machines;  the  workman  of  former  days 
would  be  unable  to  take  charge  of  the  complicated 
machinery  of  to-day  or  to  meet  the  demands  made 
by  present  methods  upon  his  brain  and  alertness. 

Five  years  ago,  had  one  asked  the  steelmakers  of 
the  country  whether  there  was  any  likelihood  of  the 
Bessemer  process  being  rivalled,  not  one  in  a  thousand 
would  have  hesitated  to  reply  with  an  emphatic  never  ! 
But  the  one  in  a  thousand,  conversant  with  recent 
experiments,  would  have  been  less  emphatic  and 
would  have  intimated  that  perhaps  even  the  Besse- 
mer process  might  not  remain  without  a  rival. 

The  merits  of  the  Siemens-Martin  open-hearth  fur- 
nace had  been  noted  by  at  least  one  firm  whose  repre- 
sentative had  seen  it  at  work  abroad.  To  Cooper, 
Hewitt  &  Co.  is  due  the  credit  of  having  been  the  first 
to  experiment  with  it  in  the  United  States.  This  was  in 
1868.  The  cost  of  open-hearth  steel  was  necessarily 
greater  than  that  of  Bessemer,  and  so  was  restricted 
to  few  uses,  but  a  new  plant  was  needed  on  a  large 
scale  to  place  the  new  process  securely  upon  its  feet 
as  a  rival  to  the  Bessemer,  ready  to  benefit  by  the 
numerous  improvements  which  clever  men  would 
make  in  the  course  of  development.  The  Thomas 
basic  process  was  found  to  be  remarkably  well  adapted 
to   the   open-hearth   furnace.     The   first   basic  open- 


STEEL  MANUFACTURE  IN  THE  U.  S.     235 

hearth  steel  in  this  country  was  made  by  the  firm  of 
Carnegie,  Phipps  &  Co.,  Limited,  at  Homestead,  in 
1888.  There  are  now  two  kinds  of  steel  made  in  the 
open  hearth,  the  acid  and  the  basic,  the  latter  much 
cheaper  than  the  former,  though  even  purer,  since  the 
basic  process  eliminates  impurities  thoroughly.  Basic 
open-hearth  steel  is  now  used  as  a  substitute  for 
Swedish  iron  in  many  instances,  even  for  horseshoes. 
Armour  is  made  of  it.  The  East  River  bridge  is  to  be 
built  of  acid  steel,  for  which  a  higher  price  is  to  be 
paid,  but  this  is  solely  because  its  engineer  is  not  open 
to  demonstration.  The  great  advantage  to  the  United 
States  of  the  basic  open-hearth  process  is  that  our 
enormous  deposits  of  iron  ores  high  in  phosphorus 
can  be  used  for  steel,  while  the  Bessemer  process  in 
American  practice  requires  ores  comparatively  free 
from  phosphorus,  the  supply  of  which  is  limited.  The 
production  of  open-hearth  steel  is  rapidly  increasing. 

Thus  the  age  of  iron,  which  passed  away  during  the 
last  century,  was  succeeded  by  the  age  of  Bessemer 
steel,  which  enjoyed  a  reign  of  only  thirty-six  years, 
beginning,  as  it  did,  in  1864,  and  is  in  turn  now  passing 
away  to  be  succeeded  by  the  age  of  Siemens  open- 
hearth  steel.  Already  the  product  of  the  open-hearth 
is  far  beyond  that  of  Bessemer  in  Britain,  and  such 
the  writer  ventures  to  predict  will  soon  be  the  case  in 
the  United  States. 

The  passing  away  of  the  Bessemer  age  has  brought 


236  THE   EMPIRE   OF    BUSINESS 

the  South  into  prominence  as  a  possible  manufacturer 
of  steel,  when  otherwise  it  never  would  have  been  in 
the  field,  its  ores  being  unsuitable  for  the  Bessemer 
process,  but  probably  soon  to  be  proved  to  be  adapted 
to  the  open-hearth  process.  Until  the  new  steel  works 
of  the  Tennessee  Company  have  been  fully  started 
and  run  for  some  time  it  cannot  be  completely  demon- 
strated whether  steel  can  be  made  there  cheap  enough 
to  make  the  South  a  great  centre  for  its  manufacture. 
The  experimental  stage  has  not  yet  been  clearly 
passed,  since  only  part  of  the  plant  has  been  operated, 
but  there  seems  little  reason  to  doubt  that  any  diffi- 
culties which  may  be  met  will  finally  be  overcome  and 
that  the  South  is  soon  to  become  an  important  factor 
in  steel  manufacture. 

The  present  centre  of  steel  is  in  the  square  made 
by  a  line  drawn  from  Pittsburg  to  Wheeling,  north- 
ward to  Lorain,  eastward  to  Cleveland,  and  south 
again  to  Pittsburg.  In  this  territory  most  of  the 
steel  is  made.  Allegheny  county  alone,  including 
Pittsburg,  produced  in  1899  nearly  one-quarter  of 
all  the  pig  iron  made  in  the  United  States,  almost  half 
of  the  open -hearth  steel,  and  almost  39  per  cent,  of 
the  total  production  of  all  kinds  of  steel.  As  far  as 
the  writer  sees  there  is  little  chance  of  this  region 
being  soon  displaced.  Colorado  will,  no  doubt,  ex- 
pand as  the  Western  coast  is  developed.  Chicago's 
position  as  a  steel  manufacturer  is  assured.     There 


STEEL  MANUFACTURE  IN  THE  U.  S.     237 

is  no  sign  of  the  great  Southwest  making  steel  to  any 
extent.  As  late  as  the  middle  of  the  last  century  the 
Eastern  States  upon  the  Atlantic  constituted  the 
home  of  steel  manufacture.  Even  in  Pennsylvania 
about  one-half  of  all  its  steel  was  made  east  of  the 
Alleghany  mountains.  Since  then  the  trend  has  been 
constant  and  rapid  to  the  region  known  as  the  Central 
West,  which  has  Pittsburg  as  its  metropolis.  The 
transfer  of  the  great  Lackawanna  Iron  and  Steel 
Works  of  Scranton,  Pa.,  to  Buffalo,  and  the  splendid 
triumphs  of  the  Bethlehem  Steel  Company,  in  Penn- 
sylvania, in  armour,  guns,  and  forgings  as  specialties, 
which  gave  it  a  unique  and  commanding  position,  are 
proofs  that  for  the  making  of  ordinary  steel  the  East  is 
not  a  favourable  location.  The  history  of  the  steel 
works  at  Troy  is  another  case  in  point.  There  is  one 
exception  to  this  march  westward,  at  Harrisburg,  in 
Eastern  Pennsylvania,  which  remains  a  prosperous 
and  important  centre  of  manufacture.  The  Maryland 
Steel  Company  at  tide-water  has  advantages  for  ex- 
port, but  probably  more  important  for  the  future  of 
that  company  is  its  development  in  shipbuilding,  for 
which  its  plant  is  well  located.  So  far  as  the  writer 
sees  there  is  nothing  to  change  the  centre  of  steel 
manufacture  in  this  country  in  the  new  century;  it  is 
in  the  Central  West  already  described,  and  there  it  is 
likely  to  remain. 

In  that  centre  itself  there  are  causes  at  work  which 


238  THE   EMPIRE   OF   BUSINESS 

may  lead  to  some  important  changes.  The  wonder- 
ful growth  of  the  lake  cities  on  the  northern  border 
of  the  Central  West  region  is  shown  by  the  recent 
census.  These  possess  the  advantages  of  the  ex- 
tremely low  cost  of  lake  transportation  and  by  the 
Welland  Canal,  by  which  vessels  of  considerable  ton- 
nage can  load  at  Conneaut  and  other  lake  ports  direct 
for  Europe,  and  above  all  the  low  rates  which  the  Erie 
Canal  insures  manufactures  for  more  than  half  the 
year.  These  are  attracting  attention,  especially  since 
an  effort  is  being  made  to  weld  the  trunk  railway  lines 
into  one  directorate  to  enable  them  to  exact  higher 
rates  of  freight  when  lower  prices  for  service  or  articles 
seem  to  be  the  prevailing  law.  The  selection  of 
Buffalo  by  the  Lackawanna  Iron  and  Steel  Company 
for  its  new  works  is  evidence  of  a  movement  to  the 
lakes.  The  policy  of  the  railroad  combination  will 
inevitably  operate  in  favor  of  the  southern  ports  and 
to  the  advantage  of  New  York.  The  differential  of 
3c.  per  hundred  in  favor  of  Baltimore  and  2c.  in  favor 
of  Philadelphia  over  New  York  certainly  means  that 
the  traffic  will  continue  to  seek  these  ports,  and  that 
New  York's  percentage  of  the  shipping  trade  will 
steadily  fall,  as  it  has  been  doing.  It  is  not  to  be  sup- 
posed, however,  that  the  City  and  State  of  New  York 
will  fail  to  protect  their  position  by  improving  the 
weapon  which  New  York  State  alone  of  all  the  States 
has  in  her  waterway  from  the  lakes  to  the  port  of  New 


I 


STEEL  MANUFACTURE  IN  THE  U.  S.       239 

York.  The  writer  takes  this  for  granted,  and  conse- 
quently predicts  a  great  development  in  steel  manu- 
facture in  that  part  of  the  Central  West  lying  along 
the  southern  border  of  Lake  Erie,  which  will  inure  to 
the  benefit  of  New  York  as  being  the  port  which  may 
be  reached  cheapest  from  the  Central  West  by  water. 

One  of  the  features  of  the  new  century  is  to  be  a 
return  to  water  transport  for  heavy  materials.  Lake 
ships  of  7,000  tons'  burden  already  exist.  Barges 
will  ply  upon  the  Ohio  river,  soon  to  be  slackwatered, 
and  upon  the  enlarged  Erie  Canal,  and  also  upon  the 
canal  from  Chicago  to  the  Mississippi,  and  many  other 
waterways  will  be  opened  upon  which  the  raw  materials 
for  steel  and  the  finished  article  itself  are  to  be  carried 
for  manufactures  at  rates  already  reached  upon  the 
lakes,  one-third  and  often  one-fourth  those  charged 
by  rail. 

It  is  scarcely  within  the  bounds  of  belief  that  any 
cheaper  or  better  process  of  making  steel  remains  to 
be  discovered,  or  that  improvements  upon  present 
methods  can  possibly  be  such  as  to  greatly  reduce  the 
cost  and  enable  steel  to  be  made  without  loss  at  less 
than  3  pounds  for  2  cents.  The  twentieth  century, 
with  all  its  wonders  yet  to  be  revealed,  will  probably 
end  with  the  manufacture  of  steel  substantially  as  it 
is  now,  by  the  open  hearth.  There  docs  not  seem 
room  for  much  improvement. 

The  last  few  years  have  witnessed   the  export  of 


240  THE    EMPIRE   OF    BUSINESS 

steel  from  our  country  to  other  lands.  The  republic 
has  not  only  supplied  its  own  wants  but  is  competing 
to  supply  the  wants  of  the  world,  not  only  in  steel  but 
in  the  thousand  and  one  articles  of  which  steel  is  the 
chief  component  part.  The  cheapness  with ,  which 
steel  is  made  is  multiplying  its  uses  to  such  an  extent 
that  estimates  made  of  the  possible  wants  of  the  world 
in  the  future  can  only  be  the  merest  guesses.  One 
illustration  out  of  many  that  could  be  given  is  that 
three  years  ago  there  was  not  a  ton  of  steel  used  for 
railway  freight  cars  in  this  country;  to-day  a  thou- 
sand tons  of  steel  per  day  are  used  for  that  purpose 
alone;  indeed,  so  rapidly  is  the  use  of  steel  extending 
that  it  is  difficult  to  see  how  the  world's  demands  can 
be  filled.  At  present  the  mines  of  ironstone  and  of 
coking  coal  in  Britain  are  worked  to  their  fullest  ca- 
pacity, and  yet  the  output  is  not  greatly  increased; 
it  is  the  same  with  those  of  Germany,  except  that 
in  the  latter  country  there  remain  some  inferior  fields 
capable  of  development  if  prices  rise,  as  is  probable. 
Russia  so  far  has  not  been  much  of  a  factor  in  steel- 
making;  if  she  is  able  to  supply  her  own  wants  by 
the  middle  of  the  century  she  will  be  doing  well.  Ex- 
cept by  the  United  States,  Great  Britain,  and  Ger- 
many little  steel  is  made,  nor  is  any  other  country 
likely  to  make  much.  The  hopes  in  regard  to  China 
and  Japan  making  steel,  the  writer  believes,  are  to 
prove    delusive.     Great    Britain    and    Germany    can 


STEEL  MANUFACTURE  IN  THE  U.  S.       241 

not  manufacture  much  beyond  what  they  do  now, 
so  that  the  increased  wants  of  the  world  can  be  met 
only  by  the  United  States.  The  known  supply  of 
suitable  ironstone  here  is  sufficient  to  meet  all  possi- 
ble demands  of  the  world  for  at  least  half  of  the  present 
century;  in  the  case  of  coke  for  the  entire  century. 
It  is  not  to  be  supposed  that  other  deposits  will  not 
be  discovered  before  known  supplies  are  exhausted. 

A  few  years  hence  the  exports  of  iron  and  steel 
and  manufactures  of  iron  and  steel  from  the  republic 
to  many  parts  of  the  world,  which  in  1900  were  valued 
at  $129,000,000,  promise  to  be  so  great  as  to  consti- 
tute another  chapter  in  the  record-breaking  history 
of  steel. 

The  influence  of  our  steel-making  capacity  upon 
development  at  home  must  be  marvellous,  for  the 
nation  that  makes  the  cheapest  steel  has  the  other 
nations  at  its  feet  so  far  as  manufacturing  in  most  of 
its  branches  is  concerned.  The  cheapest  steel  means 
the  cheapest  ships,  the  cheapest  machinery,  the  cheap- 
est thousand  and  one  articles  of  which  steel  is  the 
base.  We  are  on  the  eve  of  a  development  of  the 
manufacturing  powers  of  the  republic  such  as  the 
world  has  never  seen. 

The  republic's  progress  and  commanding  position 
as  a  steel-producer  are  told  in  a  few  words:  In  1873, 
only  twenty-seven  years  ago,  the  United  States  pro- 
duced   198,796  tons  of  steel,  and  Great  Britain,   her 


242  THE   EMPIRE    OF    BUSINESS 

chief  competitor,  653,500  tons,  more  than  three  times 
as  much.  Twenty-six  years  later,  in  1899,  the  re- 
public made  more  than  twice  as  much  as  the  mon- 
archy, the  figures  being  10,639,857  and  5,000,000 
tons  respectively,  an  eight-fold  increase  for  Great 
Britain  and  fifty-three-fold  for  the  republic,  and  it 
made  almost  40  per  cent,  of  all  the  steel  made  in  the 
world,  which  was  27,000,000  tons.  Industrial  his- 
tory has  nothing  to  show  comparable  to  this. 

So  much  for  the  past;  as  for  the  future,  ere  the 
present  century  runs  one-third  its  course,  perchance 
only  one-fourth,  the  United  States  is  to  make  more 
steel  than  all  the  rest  of  the  world  combined  and 
supply  the  wants  of  many  lands  besides  our  own. 

Farewell,  then.  Age  of  Iron;  all  hail.  King  Steel, 
and  success  to  the  republic,  the  future  seat  and  centre 
of  his  empire,  where  he  is  to  sit  enthroned  and  work 
his  wonders  upon  the  earth. 


The  Cost  of  Living  in  Britain 

compared     with    the 

United  States 

The  costs  of  the  necessities  of  life  in  England  and 
America.  Why  the  American  can  enjoy  luxuries 
that  are  denied  the  Englishman. 


THE    COST    OF    LIVING    IN    BRITAIN 

COMPARED     WITH    THE 

UNITED   STATES 

IF  asked  upon  what  subject  the  general  opinion  of 
Britons  was  farthest  astray  regarding  the  United 
States,  one  would  not  be  far  wrong  in  answering,  As  to 
the  comparative  cost  of  living  in  the  old  land  and  in 
the  new. 

It  will  probably  prove  a  work  of  time  and  of  some 
difficulty  to  remove  an  impression  so  generally  enter- 
tained as  that  which  finds  expression  in  the  words 
recently  spoken  by  a  high  English  authority — viz., 
that  "the  United  States  would  be  a  perfect  El  Dorado 
for  the  workingman,  if  it  were  not  for  the  high  cost  of 
hving." 

It  is  easy  to  show  how  this  impression  has  arisen. 
The  Briton  arrives  in  New  York  and  hires  a  carriage, 
which  has  been  waiting  for  the  steamer  several  hours ; 
he  is  charged  an  exorbitant  price;  he  orders  a  bottle 
of  imported  wine,  and  finds  it  much  dearer  than  at 
home;  he  learns  that  the  cost  of  clothing  made  to 
order  from  imported  material  is  also  much  dearer: 
and  these  things  strike  him  deeply,  because  they  are 
the  first  impressions  received.     When  asked  upon  liis 

From   The  Contemporary  Review,  September,  1894 

245 


246  THE    EMPIRE    OF    BUSINESS 

return  upon  what  data  he  has  reached  the  conclusion 
that  the  cost  of  Hving  is  dearer  in  the  United  States 
than  at  home,  he  invariably  gives  these  three  items, 
and  stops  there.  But  these  do  not  constitute  the  chief 
sources  of  expenditure  even  to  travellers,  much  less 
to  residents.  Asked  how  he  found  the  cost  of  living 
at  hotels,  he  remembers  that  it  costs  less  in  the  Re- 
public, where  the  charge  in  the  best  hotels  is  from 
fourteen  to  eighteen  shillings  ($3.50  to  $4.50)  per  day, 
the  latter  being  the  extreme  rate  in  New  York.  For 
this  he  has  a  comfortable  room  and  all  meals — break- 
fast, luncheon,  dinner  and  supper.  He  also  remem- 
bers that  he  could  scarcely  have  such  a  dinner  at  the 
Metropole  in  London  for  the  entire  eighteen  shillings 
($4.50)  which  pay  for  all  meals  and  a  room  at  a 
good  hotel  in  New  York.  Asked  how  he  found 
the  cost  of  travelling,  he  figures  a  little  and  finds  that 
it  is  just  a  little  more  than  one-half,  first-class,  even 
including  sleeping  cars.  The  cheaper  cost  of  railway 
travel  per  mile,  and  of  hotels,  is  not  nearly  offset  by 
the  extra  cost  of  cabs  and  foreign  wines.  The  visitor 
buys  no  clothing,  and  if  wise  will  follow  the  American 
example  and  use  the  hotel  omnibuses  or  electric  cars, 
and  rarely,  if  ever,  use  cabs,  which  are  not  an  American 
institution.  If  the  visitor  wishes,  however,  to  hire 
a  carriage  and  pair  by  the  day,  week,  or  month,  or  for 
theatre  or  reception,  he  is  provided  in  New  York  at 
prices  not  beyond   those   charged   in   London — forty 


THE  COST  OF  LIVING  IN  BRITAIN 


'47 


to  fifty  pounds  ($200  to  $250)  per  month,  according 
to  circumstances,  and  twelve  shillings  ($3.00)  per 
night  for  a  brougham;  for  an  afternoon  in  the  park 
the  charge  for  a  carriage  and  pair  is  even  less  in  New- 
York.  It  is  undoubtedly  a  fact  that  the  cost  of  travel, 
including  all  necessary  expenditures  per  day,  over 
equal  distances,  is  much  dearer  in  Britain  than  in 
America.  But  this  fact  affects  only  the  few  travellers, 
usually  persons  of  means,  and  is  of  little  moment. 
The  great  point  is,  as  to  the  comparative  cost  of  living 
to  the  mass  of  people,  the  wage-earning  class  of  the 
two  coim tries. 

Let  us  calmly  consider  this.  The  income  of  the 
mass  of  workingmen,  skilled  and  unskilled,  is  from 
;;<^6o  to  £120  sterling  (300  to  600  dollars)  per  year. 
Now  we  must  first  learn  the  percentage  of  these  earn- 
ings spent  for  each  of  the  principal  necessaries  of  life. 
According  to  the  Bureau  of  Labor  statistics  of  Massa- 
chusetts, the  highest  authority,  these  in  England  and 
America  are  as  follows: 


Income,  #300  (;£6o)  to  J450  (£cp)  per  year. 

Income,  #450  (£c)o)  to  $600  (;£iio)  per  year. 

Items. 

American. 

Knyjlisli. 

Items. 

American. 

Knglish. 

Subsistence. . 

Clothing 

Rent 

Fuel 

Sundries 

64 

7 

20 
6 
3 

81 

7 

13 
7 
3 

Subsistence.. 

Clothing 

Kent 

Fuel 

.Sundries 

Total 

63 

10.50 

15.50 

6 

5 

7875 
10.50 

10.37 

6 

5 

ToUl 

100 

1 10 

100.00 

110.62 

248  THE   EMPIRE   OF    BUSINESS 

This  shows  the  increased  cost  of  articles  in  Britain 
to  be  ID  1-2  per  cent.  But  prices  in  the  United  States 
have  fallen  since  this  table  was  made,  much  more  than 
in  Britain.  In  Charles  Booth's  valuable  work,  "  Labour 
and  Life  of  the  People"  (British),  he  gives  the  amount 
spent  for  food  alone  as  from  60  to  50  per  cent.,  ac- 
cording to  the  family  revenues.  In  the  broader  term 
"subsistence,"  not  only  food,  but  all  that  enters  the 
mouth  is  embraced.  Thus  "subsistence"  is  the  chief 
item  of  cost  for  the  workingman's  family.  It  ranges 
from  64  per  cent,  in  America  to  81  in  England.  The 
reason  for  this  difference  is  obvious.  Of  course,  all 
food  is  cheaper  in  the  United  States  than  in  Britain. 
The  former  exports  it  to  the  latter.  Tobacco  is  very 
much  cheaper.  America  grows  tobacco,  and  only  taxes 
it  3G?  (6  cents)  per  pound,  as  against  a  35.  6d.  (84 
cents)  tax  in  the  Monarchy — fourteen  times  as  great. 
Of  course,  what  he  drinks  is  cheaper.  The  duty  on 
whisky  is  2od.  (40  cents)  per  gallon,  as  against  ii5. 
($2.64) — six  times  greater — in  Britain,  and  it  is  made 
more  cheaply  in  Kentucky  than  in  Ireland  or  Scot- 
land. Upon  beer  the  taxation  is  45.  and  75.  (96  cents 
and  $1.75)  respectively  per  barrel.  Tea  and  coffee  are 
free  of  duty  to  the  American;  they  are  taxed  to  the 
Briton.  Sugar  (raw)  is  free  in  both  lands,  but  in  the 
Republic  there  is  a  slight  tax  upon  foreign  refined. 
When  the  masses  in  Britain  realize  how  heavily  they 
are  taxed  compared  with  the  workers  of  the  United 


THE  COST  OF  LIVING  IN  BRITAIN       249 

States,  there  will  probably  be  a  prompt  demand  for 
reductions  upon  articles  embraced  in  the  term  "Sub- 
sistence," and  especially  for  a  free  breakfast-table. 

The  low  cost  of  what  goes  into  the  mouths  of  the 
people  throughout  the  United  States  would  surprise 
any  British  investigator  who  made  it  a  study,  but 
the  cost  of  living  in  the  forty-four  States,  occupying 
a  continent,  is  to  be  determined  not  only  in  New  York 
City,  and  in  the  cities  and  towns  upon  the  Atlantic 
sea-coast,  to  which  products  of  the  great  West  have 
to  be  transported,  but  also  by  taking  into  account  cost 
at  the  centre  of  population,  which  is  now  near  Indian- 
apolis, Indiana,  midway  between  Chicago  and  St. 
Louis,  eight  hundred  miles  inland  from  New  York. 

Having  dealt  with,  say,  three-fourths  of  the  total 
expenditure  of  the  workingman's  family — namely, 
that  for  "subsistence" — and  found  that  it  cannot  be 
otherwise  than  that  the  articles  consumed  must  be 
cheaper  in  Indianapolis  than  in  Manchester,  by  at 
least  the  cost  of  rail  and  ocean  transport  and  mer- 
chant's profits,  we  come  to  the  second  item,  which  is 
"rent,"  consuming  20  per  cent,  of  the  earnings  of  the 
family  in  America  and  13  in  England.  The  British 
workman  lives  in  a  smaller  house.  The  better  class 
of  American,  as  a  rule,  has  three  or  four  rooms;  the 
Briton  two.  Rent  is  undoubtedly  much  higher  in 
the  newer  land. 

The  next  item  in  importance  is  "clothing,"  which 


250  THE   EMPIRE   OF    BUSINESS 

represents  7  per  cent,  of  the  expenditure  in  the  United 
States,  and  exactly  the  same  percentage  in  Britain. 
This  will,  no  doubt,  surprise  most  readers  until  the 
reason  is  given,  which  is,  that  while  clothing  made 
from  the  finest  imported  cloth  is  very  much  dearer  in 
America  than  in  Britain  where  the  cloth  is  produced, 
clothing  made  from  the  American  cloth  is  very  cheap 
indeed  and  serviceable.  It  is,  however,  coarse  and 
harsh,  and  not  so  agreeable  to  wear — harsher  even 
than  the  Scotch  cheviot.  But  the  mass  of  the  people 
wear  it  as  they  wear  woollen  underclothing  of  the  same 
kind.  Hence  the  masses  are  not  affected  by  the 
duties  placed  upon  the  fine  woollens,  which  are  im- 
ported only  for  the  rich  few.  I  have  before  me  adver- 
tisements in  the  American  papers  of  complete  suits  of 
ready-made  clothing  ranging  from  two  to  three  pound 
(ten  to  fifteen  dollars) — just  the  cost  in  Britain. 

Here  is  a  true  story  bearing  upon  this  subject.  A 
well-known  member  of  Parliament,  addressing  his 
constituents  in  the  Midlands  some  time  ago,  told  them 
that  living  for  the  workingman  was  much  higher  in 
America  than  in  Britain,  and  said  that  the  cost  of 
clothing  was  three  times  as  great.  A  copy  of  this 
speech  was  sent  to  his  friend,  one  of  the  best-known 
men  in  the  United  States,  whom  the  speaker  was  in 
the  habit  of  visiting.  A  short  time  after,  he  visited 
his  friend  in  the  Republic,  accompanied  by  his  wife. 
One  morning  the  host  appeared  at  breakfast  in  a  new 


THE  COST  OF  LIVING  IN  BRITAIN       251 

suit  which  ehcited  general  admiration,  the  Enghsh 
lady  stating  that  it  was  "much  smarter  than  the  suit 
worn  by  her  husband."  The  host  then  asked  his 
visitor  what  he  supposed  the  suit  cost  him;  to  which 
the  unwary  Briton  replied,  "Well,  the  suit  I  am  now 
wearing  cost  me  £"]  (35  dollars),  and  I  suppose  yours, 
in  this  terribly  protected  country,  must  have  cost  ;^i  2 
(60  dollars)."  This  was  his  opinion  after  having  ex- 
amined the  suit.  "Well,"  said  his  host,  "I  paid  just 
$4.50  (i8j.)  for  this  suit,  and  I  wish  you  to  take  it  back 
to  England  and  show  it  to  your  constituents  and  tell 
them  this."  Amidst  much  laughter,  this  was  de- 
clined. His  host  had  seen  in  the  village  a  travelling 
van  from  Boston,  from  which  ready-made  clothing 
was  being  sold,  and  asked  the  vender  if  he  had  a  suit 
to  fit  him ;  to  which  he  replied  "  Yes,  and  if  you  take  a 
suit  you  can  have  it  at  wholesale  price.  Retail  price 
is  $6  (245.).  "  "  Very  good :  send  it  to  the  house. "  It 
was  promptly  sent,  with  the  result  stated.  Of  course 
it  was  American  material,  not  as  smooth  or  as  fine  as 
the  cloth  worn  by  the  honourable  member;  neverthe- 
less, a  good,  smart  suit.  The  price,  however,  was  so 
ver>'  low  that  it  is  fair  to  record  that  I  should  hesitate 
to  say  that  it  was  likely  to  prove  serviceable.  For  £7, 
($15.00),  however,  serviceable  suits  are  easily  ob- 
tained. 

When   we   look   at   the   amount   of   the   extra   fine 
wf)f)llcn  goods  imported  by  the  United  States,  we  see 


252  THE   EMPIRE   OF    BUSINESS 

how  trifling  it  is,  compared  with  the  total  consump- 
tion of  wool.  In  1890  the  value  of  home  woollen  man- 
ufactures was  $338,000,000 — say  sixty-eight  millions 
sterling.  The  import  of  the  high-priced  fine  foreign 
woollens  was  only  $35,500,000 — seven  and  a  tenth 
millions  sterling.  It  is  safe  to  say  that  the  value  per 
yard  of  the  foreign  was  double  that  of  the  domestic; 
hence  the  number  of  yards  of  foreign  woollens  used 
was  not  much  beyond  5  per  cent,  of  the  amount  con- 
sumed, and  all  by  the  few  wealthy  people,  who  alone 
use  the  high-priced  foreign  articles. 

We  have  the  same  result  with  cotton  manufactures, 
the  value  of  the  home  American  product  being  $268,000,- 
000 — fifty-four  millions  sterling ;  the  amount  imported 
being  $28,000,000,  not  six  millions  sterling,  which  repre- 
sents not  quite  5  per  cent,  of  the  total  consumption, 
assuming  double  value  per  yard  for  the  foreign.  The 
amount  of  cotton  goods  used  by  a  workingman's 
family  is  considerable. 

In  regard  to  silks  we  have  the  following  figures  for 
the  year  1890:  product  of  American  mills,  $69,000,000 
— thirteen  millions  eight  hundred  thousand  sterling; 
the  imported  manufactured  silk,  $31,000,000 — six 
millions  two  hundred  thousand  sterling.  It  may 
safely  be  assumed  that  the  value  of  silks  imported, 
per  yard,  was  double  that  of  the  domestic,  so  that 
more  than  four  yards  of  American  silk  were  consumed 
to  one  of  foreign. 


THE  COST  OF  LIVING  IN  BRITAIN       253 

While  upon  the  subject  of  clothing  I  may  note  two 
facts  within  my  own  experience.  An  American 
family,  having  numerous  servants,  resides  part  of 
each  year  in  Britain.  The  servants  pass  to  and  fro 
and  thus  have  opportunities  to  ptirchase  their  cloth- 
ing, boots  and  shoes,  etc.,  either  in  the  one  land  or  the 
other.  The  men-servants  continue  to  purchase  cloth- 
ing in  the  old  land.  The  women-servants  find  they 
can  purchase  to  better  advantage  in  New  York.  Boots 
and  shoes  are  purchased  by  all  in  New  York. 

The  second  instance:  A  Scotch-American  family 
with  five  children  spend  part  of  almost  every  year  in 
Scotland.  The  able,  thrifty  mother  formerly  took 
the  opportunity  to  supply  her  own  and  the  children's 
clothing,  etc.,  in  Glasgow.  Upon  recent  visits  she 
has  purchased  nothing  upon  this  side,  and  I  heard 
her  give  as  a  reason,  that  she  found  that  clothing  for 
herself,  and  especially  for  her  children,  could  now  be 
purchased  better  and  cheaper  in  New  York  than  in 
Glasgow. 

The  well-known  Free-Trade  or  tariff-reform  writer, 
Mr.  Schoenhof,  was  deputed  by  the  State  Department 
to  report  upon  cost  in  the  United  States  and 
Britain,  and  reported  as  follows  some  years  ago: — 

"So  far  as  clothing  and  dry  goods  in  general  are 
concerned,  I  find  that  cotton  goods  are  fully  as  cheap 
in  the  United  States  as  here.  Shirtings  and  sheetings, 
if  anything,  are  superior  in  quality  for  the  same  money 


2  54  THE    EMPIRE   OF   BUSINESS 

with  us,  so  far  as  I  can  judge  from  the  articles  exposed 
for  sale  in  the  retail  stores.  Articles  for  underwear 
for  women,  made  of  muslin,  are  far  superior  in  work- 
manship and  finish,  and  cheaper  in  price,  in  the  United 
States.  Nor  can  I  find  that  men's  shirts,  when  chiefly 
of  cotton,  are  any  cheaper  here.  Of  boots  and  shoes, 
if  factory  made,  the  same  may  be  said.  In  work- 
manship and  finish  I  find  corresponding  articles  of  the 
wholesale  process  of  manufacture  superior  in  the 
United  States.  This  is  true  of  clothing  as  well  as  of 
cuffs,  collars,  and  like  articles." 

Prices  of  articles  other  than  agricultural  have  fallen 
in  the  United  States  much  more  than  in  Britain  since 
Mr.  Schoenhof  reported.  This  fall  has  been  so  great 
as  to  put  the  price  of  Bessemer,  pig-iron,  and  steel 
billets  at  Pittsburg  lower  than  at  Middlesborough ;  to 
enable  American  carpets  to  be  sold  in  Britain ;  to  tempt 
the  leading  American  shipbuilders  to  ask  permission 
to  tender  for  some  of  the  new  British  war-ships;  the 
Clyde  Trustees  to  purchase  their  new  and  powerful 
dredgers  in  New  York.  It  has  also  enabled  the  Ameri- 
can manufacturer  of  agricultural  implements  to  reach 
the  British  market,  and  the  quarrymen  to  send  granite 
from  Maine  to  Aberdeen. 

The  next  item  which  figures  in  the  expenses  of  the 
workingman's  family  is  "fuel."  Speaking  generally, 
this  is  much  cheaper  in  the  United  States  than  in 
Britain.     If   we    compare    New    York    and    London, 


THE  COST  OF  LIVING  IN  BRITAIN       255 

New  York  receives  anthracite  coal  as  cheaply  as  Lon- 
don receives  bituminous  coal.  The  former  will,  at 
least,  give  double  serv^ice,  and  it  is  said  to  yield  three 
times  as  much.  In  the  centre  of  population  in  the 
United  States  the  cost  of  coal  does  not  exceed  Ss. 
(about  $2.00)  per  ton.  In  the  great  western  Pennsyl- 
vania and  Ohio  districts  it  is  not  more  than  6s.  The 
American  has  to  use  more  coal  in  winter  owing  to  the 
severer  cold,  and  has  more  fires  going  in  his  larger 
house.  Experts  have  found  that  the  percentage  of 
their  earnings  spent  by  the  American  and  Briton  on 
fuel  is  equal — viz.,  6  per  cent. 

It  has  been  common  in  Britain  to  attribute  the 
supposed  higher  cost  of  living  in  the  United  States 
to  the  effect  of  the  tariff.  Now  a  little  consideration 
will  show  that  this  impression  is  not  well  founded. 
The  principal  highly-taxed  articles  imder  the  McKin- 
ley  Bill  are  five :  First,  the  extra  fine  silks  of  France ; 
second,  the  fine  woollens  and  linens  of  Britain ;  third, 
the  extra  fine  linens  of  Germany  and  France;  fourth, 
the  high-priced  wines  of  France;  and  fifth,  Havana 
tobacco  and  cigars.  The  duties  on  all  these  are  very 
high.  Woollens  60  per  cent,  of  their  value,  silks  even 
higher,  champagnes,  325.  per  dozen,  etc.,  etc.  This 
is  our  "Democratic"  Budget.  There  is  not  a  work- 
ingman  in  America  who  uses  any  of  these  articles. 
It  is  considered  good  policy  thus  to  tax  heavily  the 
luxuries  of  the  rich,  and  admit  free  the  tea  and  cofTce 


2  56  THE   EMPIRE   OF    BUSINESS 

and  raw  sugar  used  by  the  masses.  It  is  not  probable 
that  this  poHcy  will  be  reversed,  or  even  greatly  modi- 
fied, however  much  talk  there  may  be  of  tariff  reform. 
Indeed,  the  wholesome  tendency  now  seen  in  Britain 
to  lay  the  burden  of  taxation  upon  the  wealthy  few 
who  can  best  afford  to  bear  it  is  not  less  strongly 
marked  in  the  Republic.  The  necessaries  of  life  used 
by  the  workers  will  probably  remain  duty  free  in  the 
Republic  and  soon  become  free  in  the  Monarchy,  and 
the  luxuries  of  the  rich  will  continue  to  be  taxed  more 
and  more  in  both  lands. 

The  position  of  the  supposed  unfortunate  farmer  of 
the  United  States  used  to  be  cited,  and  the  point  made, 
that  owing  to  the  tax  upon  machinery  he  had  to  pay 
more  for  his  agricultural  implements  than  was  other- 
wise necessary,  but  as  the  American  has  now  the  com- 
mand of  the  world  for  agricultural  machinery,  and 
exports  it,  the  farmer  is  no  longer  interested  in  the 
tax  upon  foreign  machinery. 

The  appearance  of  the  United  States  as  an  export- 
ing country  of  manufactured  articles,  owing  to  re- 
duced costs,  is  one  of  the  notable  events  of  recent 
years.  Here  are  a  few  items:  In  the  year  1893  agri- 
cultural implements  were  exported  to  many  parts  of 
the  world  to  the  extent  of  nearly  ;!^i,ooo,ooo  (about 
$5,000,000);  manufactures  of  copper  to  the  extent  of 
;^9oo,ooo  ($4,500,000);  cotton  manufactures,  ;^2,40o,- 
000  ($12,000,000);  iron  and  steel,  and  manufactures 


THE  COST  OF  LIVING  IN  BRITAIN       257 

of  these,  ;^6,ooo,ooo  ($30,000,000) ;  carriages,  cars, 
etc.,  more  than  ;^5oo,ooo  ($2,500,000);  wood,  and 
manufactures  of  wood,  over  ;^5,ooo,ooo  sterling  ($25,- 
000,000),  American  furniture  being  now  largely  ex- 
ported. 

In  the  year  1892  the  Republic  exported  as  much 
iron  and  steel,  and  manufactures  thereof,  as  she  im- 
ported— viz.,  $28,000,000  worth  in  both  cases — five 
and  three-quarter  millions  sterling. 

It  is  notable  that  musical  instruments,  valued  at 
;j^36o,ooo  ($1,800,000),  were  exported;  glass  and  glass 
ware  to  the  extent  of  ;^i  ,600,000  ($8,000,000) ;  leather 
and  manufactures  of  leather,  over  ;^2,ooo,ooo  ($10,- 
000,000) ;  paper  and  manufactures  of  paper,  to  the 
extent  of  over  ;i{^3oo,ooo  ($1,500,000)  (some  English 
journals  are  now  printed  upon  American  paper) ;  in- 
struments for  scientific  purposes,  ;^26o,ooo  ($1,300,- 
000);  clocks  and  watches,  over  ;^2oo,ooo  ($1,000,000). 

The  export  of  manufactured  articles  rapidly  in- 
creases year  after  year,  but,  unlike  that  of  Britain, 
must  ever  remain  totally  insignificant  as  compared 
with  the  value  of  the  total  home  production  of  manu- 
factures, which  was  no  less  in  1890  than  ;^i, 7 50, 000, 000 
($8,750,000,000).  The  value  of  British  manufactures 
in  1888  was  not  quite  half  as  great,  being  ;^82o,ooo,ooo 
($4,100,000,000). 

The  prosperity  of  a  new  continent  like  the  United 
States  is  not  to  be  guaged  by  its  foreign  but  by  its  home 


258  THE   EMPIRE    OF    BUSINESS 

commerce.  As  the  new  land  more  and  more  supplies 
its  own  wants,  her  foreign  commerce  must  relatively 
decline;  more  of  the  cotton  grown,  for  instance,  being 
manufactured  at  home,  and  less  going  abroad,  and  so 
with  all  the  natural  products,  as  also  with  many  ar- 
ticles now  imported,  which  will  be  made  at  home. 

In  view  of  the  facts  here  noted,  and  also  the  obvious 
fact,  that  subsistence  must  be  cheaper  in  one  country 
than  in  the  other,  and  that  this  embraces  three-fourths 
of  the  total  cost  of  the  necessaries  of  life  for  a  work- 
ingman's  family,  how  are  we  to  account  for  the  general 
impression  still  lingering  in  Britain,  that  the  cost  of 
living  is  higher  in  the  United  States  ?  Simply  for  this 
reason:  that  while  it  is  true  that  a  pound  sterling  in 
the  United  States  to-day  will  purchase  more  of  the 
necessaries  of  life  for  the  mass  of  the  people  than  it  will 
in  Britain,  and  while  the  American  workman  has  great 
advantages  over  his  fellow  British  workman  in  con- 
sequence, still  it  does  not  follow  by  any  means  that 
the  American  workman  lives  as  cheaply  as  the  Briton 
— far  from  it.  He  has  much  higher  wages.  The  re- 
port of  the  Senate  Committee  recently  made  shows 
that  the  average  percentage  of  American  wages  ob- 
tained by  the  British  workman  is  only  561-2  per  cent. — 
not  much  more  than  one  half — the  principal  handi- 
crafts being  made  the  basis  of  comparison.  Having 
higher  revenues,  the  American  is  not  content  to  live 
without  what  would  be  considered  luxuries  in  any  of 


THE  COST  OF  LIVING  IN  BRITAIN       259 

the  old  countries  of  Europe.  He  earns  more  and  he 
spends  more.  Therefore,  in  one  sense  it  is  true  that 
the  cost  of  living  as  the  American  workman  lives  is 
greater  than  that  of  the  Briton  as  he  lives.  But  it  is 
none  the  less  true  that  this  arises  from  the  fact  that 
he  lives  in  a  different  manner.  For  those  similar 
things  which  are  absolutely  necessary  the  cost  is  much 
less  in  the  newer  land. 

The  American  workman  and  his  family  can  live 
very  cheaply  indeed  if  so  inclined,  or  they  can  spend 
inordinately  just  as  easily  as  in  any  other  country. 
We  find  this  proven  by  the  expenditures  of  foreign 
workmen,  especially  Hungarians  and  Italians,  who 
have  in  recent  years  emigrated  to  the  United  States 
in  great  numbers.  The  usual  price  paid  by  these  for- 
eigners to  the  keeper  of  the  boarding-house  is  ten  cents 
(5c/.)  per  day  for  food.  They  usually  sleep  in  wooden 
huts  erected  for  them  by  their  employers.  In  times 
of  unexampled  industrial  depression,  like  the  present, 
the  ability  of  the  masses  of  the  people  of  the  United 
States  to  live  cheaply  and  yet  comfortably  is  of  the 
greatest  moment,  for  it  has  shielded  them  from  much 
acute  suffering  which  would  otherwise  have  resulted 
from  the  lack  of  work — an  experience  new  to  this  gen- 
eration of  Americans,  and  likely  soon  to  pass  away, 
unless  the  faith  of  capital  in  the  maintenance  of  the 
gold  standard  be  again  shaken.  An  equivocal  note 
upon    this   subject,    struck   by   the   Secretary   of   the 


26o  THE   EMPIRE   OF   BUSINESS 

Treasury  in  May  last  year,  paralyzed  the  business  of  the 
country  for  the  time — and  recovery  has  been  retarded 
by  impending  new  legislation  affecting  duties  upon 
imports. 

Whether  America  be  the  El  Dorado  of  the  working- 
man  or  not,  depends  upon  the  workman  himself.  He 
and  his  family  can  now  live  for  less  than  a  family  in 
Britain,  if  they  will  live  as  frugally.  They  are  in  the 
position  of  the  old  Scotchwoman  I  knew,  who,  being 
asked  if  she  could  live  upon  a  certain  sum  as  an  an- 
nuity, replied,  "  Ou  ay,  I  could  live  on  half  o't,  but  I 
could  spend  dooble. "  That  is  to  say,  a  pound  sterling 
in  the  new  land,  judiciously  spent  for  the  necessaries 
of  life  by  the  workingman  and  his  family,  will  to-day 
purchase  more  of  these  in  the  new  than  in  the  old 
home  of  our  race — a  fact  probably  fraught  with  far- 
reaching  consequences  upon  both  sides  of  the  Atlantic 
in  the  not  distant  future. 


The  Natural  Oil  and  Gas  Wells 
of    Western  Pennsylvania 

A  short  history  of  the  discovery  of  oil  and  gas.  The 
method  of  driving  wells  and  the  use  of  the  product. 
The  fortunes  won  on  a  small  capital.  The  possibilities 
of  its  use  in  the  future. 


THE  NATURAL  OIL  AND  GAS  WELLS 
OF  WESTERN  PENNSYLVANIA 

THAT  the  novel  fuel  which  the  earth  has  re- 
cently thrown  forth  for  us  should  attract 
general  attention  is  not  to  be  wondered  at,  for  cer- 
tainly nothing  like  it  has  hitherto  ever  been  known. 
Probably  the  richest  district  in  subterranean  treas- 
ures upon  the  face  of  the  earth  is  Western  Pennsyl- 
vania, which  has  for  its  metropolis  the  smoky  city  of 
Pittsburg.  To  the  southeast  of  the  city  lies  the 
famous  deposit  of  coking  coal,  known  and  used  all  over 
America  from  the  Atlantic  seaboard  to  the  silver 
mines  of  Colorado.  The  vein  is  from  seven  to  nine 
feet  deep,  and  embraces  an  area  of  two  hundred  square 
miles.  It  is  so  favourably  situated  for  mining,  that 
thousands  of  tons  of  coke  have  been  sold  for  three 
shillings  and  sixpence  (84  cents  per  gross  ton),  loaded 
upon  cars.  The  growth  of  this  trade  has  ^een  rapid, 
even  for  this  country,  for  the  men  are  still  living  who 
built  the  first  coking  oven,  while  there  are  t6-day  be- 
tween nine  and  ten  thousand  oven?  It  is  but  twenty 
years  since  the  coke  was  first  used  ii.  the  blast  furnace. 
In  the  year  1882  there  were  made  138.001,840  bushels. 
Directly  east  of    Pittsburg    lies    the   Westmore  and 

From  Macmillan's  Magazine,  January,  1885. 

263 


264  THE   EMPIRE   OF   BUSINESS 

gas  coal  field,  from  which  the  eastern  cities  draw  their 
supplies  for  gas.  The  vein  of  this  coal  is  from  five  to 
six  feet  deep,  and  so  easily  mined  that  the  Pennsyl- 
vania Railroad  Company  obtains  coal  loaded  in  the 
engine  tenders  for  about  three  shillings  (72  cents)  per 
gross  ton.  The  field  extends  east  and  southeast  of 
the  city,  along  the  banks  of  the  Monongahela  and 
Youghiogheny  rivers.  It  is  from  mines  on  their  banks 
that  cities,  even  as  far  away  as  New  Orleans,  are  sup- 
plied with  gas  coal.  The  annual  production  exceeds 
7,000,000  tons. 

Turning  now  from  the  coking  and  the  gas  coal  de- 
posits towards  the  north,  and  at  a  distance  of  a  hun- 
dred miles  from  Pittsburg,  we  reach  the  oil  region. 
Rapid  as  has  been  the  development  of  coke  and  gas 
coal,  that  of  petroleum  eclipses  anything  ever  known. 
It  is  only  twenty-two  years  since  I  visited,  in  company 
with  some  friends,  the  then  famous  oil  well  of  the 
Storey  Farm,  upon  Oil  Creek.  The  oil  was  then  run- 
ning from  the  well  into  the  creek,  where  a  few  flat- 
bottomed  scows  lay  filled  with  it,  ready  to  be  floated 
down  to  the  Alleghany  river  upon  an  agreed-upon  day 
each  week,  when  the  creek  was  flooded  by  means  of 
a  temporary  dam.  This  was  the  beginning  of  the 
natural  oil  business.  We  purchased  the  farm  for 
;^8,ooo  (about  $39,000)  sterling,  and  so  small  was  our 
faith  in  the  ability  of  the  earth  to  yield  for  any  con- 
siderable time  the  hundred  barrels  per  day  which  the 


NATUR.\L    OIL    AND    GAS    WELLS 


2^:) 


well  was  then  producing,  that  we  decided  to  make  a 
pond  capable  of  holding  100,000  barrels  of  oil,  which 
we  estimated  would  be  worth  200,000/.  (about  $975,- 
000)  when  the  supply  ceased.  Unfortunately  for  us 
the  pond  leaked  fearfully;  evaporation  also  caused 
much  loss,  but  we  continued  to  run  oil  in  to  make  the 
losses  good  day  after  day  until  several  hundred  thou- 
sand barrels  had  gone  in  this  fashion.  Our  experience 
with  the  farm  may  be  worth  reciting.  Its  value  rose 
to  1,000,000/.  (about  $4,870,000);  that  is,  the  shares 
of  the  company  sold  in  the  market  upon  this  basis; 
and  one  year  it  paid  in  cash  dividends  200,000/.  (about 
$975,000)  sterling — rather  a  good  return  upon  an  in- 
vestment of  8,000/.  But  this  is  an  exceptional  result, 
many  thousands  of  pounds  having  been  lost  by  in- 
vestors in  oil  properties.  Only  a  few  years  before 
this,  the  same  oil  had  been  sold  at  eight  shillings  (about 
two  dollars)  per  bottle,  as  a  certain  cure  for  all  the 
known  or  imagined  disorders  of  man.  It  was  then 
known  as  Seneca  oil,  "the  great  Indian  remedy," 
because  the  tribe  of  Indians  of  that  name,  which  then 
inhabited  the  district,  skimmed  the  oil  from  the  sur- 
face of  the  creek.  "The  sovereign  remedy"  now  sells 
for  less  than  three  shillings  (about  seventy-five  cents) 
per  barrel,  but  strange  to  say  the  people  who  eagerly 
bought  it  for  eight  shillings  per  bottle,  and  gave  testi- 
mony to  its  healing  properties,  now  find  that  all  its 
virtues  have  fled  since  it  can  be  purchased  for  a  half- 


266  THE   EMPIRE   OF    BUSINESS 

penny.     So  much  for  the  mysterious  in  materia  medica. 

Starting,  then,  at  nothing  only  about  twenty  years 
ago,  we  find  the  region  now  (1885)  giving  forth  70,000 
barrels  of  oil  per  day.  On  the  first  day  of  November 
last  there  were  stored  in  tanks  no  less  than  38,034,337 
barrels,  an  amount  sufficient  to  meet  the  wants  of  the 
world  for  some  years.  Up  to  January  ist,  1884,  this 
region  has  yielded  250,000,000  barrels  of  oil,  and  still 
it  flows  in  increasing  quantities  day  after  day.  To 
transport  this  enormous  traffic  6,200  miles  of  iron 
pipe  lines  have  been  laid.  The  oil  is  pumped  through 
these  from  the  wells — which  number  21,000 — to  the 
seaboard,  a  distance  of  about  300  miles. 

The  value  of  petroleum  and  its  products  exported 
in  the  year  1877  amounted  to  $61,789,438,  or  over 
12,000,000/.  sterling.  In  1883  its  exports  were  only 
9,000,000/.  sterling  (about  $45,000,000)  in  value,  al- 
though the  number  of  gallons  (656,363,869)  was  al- 
most double  that  exported  in  the  year  1877.  The 
total  amount  exported  up  to  January  ist,  1884,  ex- 
ceeds in  value  125,000,000/.  (about  $625,000,000) 
sterling.  It  may  confidently  be  said  that  the  oil  wells 
of  Western  Pennsylvania  bid  fair  to  yield  sufficient 
to  pay  off  the  entire  national  debt  before  they  are  ex- 
hausted. 

We  come  now  to  the  latest  revelation  of  our  sub- 
terranean treasures,  viz.,  the  natural  gas  wells,  which 
are    rapidly    surrounding    Pittsburg.       Just    as    the 


NATURAL    OIL    AND    GAS    WELLS       267 

natural  oil  was  seen  upon  the  surface  of  Oil  Creek 
(hence  its  name),  so  throughout  the  district  northeast 
of  Pittsburg,  and  about  fifteen  miles  distant,  small 
jets  of  gas  have  been  seen  bubbling  up  through  the 
waters  of  the  creeks.  A  marsh  gas  has  also  been 
found  for  many  years,  at  a  depth  of  twenty  feet,  which 
the  farmers  sometimes  use  for  boiling  the  sap  of  the 
maple  tree  into  sugar.  The  centre  of  this  natural  gas 
district  is  the  village  of  Murraysville,  in  Westmoreland 
County.  In  the  race  of  a  small  flour  mill  at  that 
place,  a  larger  amount  of  gas  than  usual  had  been 
noticed,  and  fifteen  years  ago  a  party  of  speculators 
bored  there,  hoping  to  find  oil,  but  after  boring  to  a 
depth  of  900  feet,  nothing  was  found.  Seven  years 
later  another  party  concluded  to  try  it  again,  and 
decided  not  to  stop  boring  until  a  much  greater  depth 
had  been  reached.  Their  hope,  of  course,  was  that 
oil  would  be  obtained,  but  when  they  had  bored  to  a 
depth  of  1,320  feet  a  tremendous  explosion  occurred, 
which  drove  the  drills  from  the  well  into  the  air  and 
broke  everything  to  pieces.  The  roar  of  the  escaping 
gas  was  heard  in  Monroeville,  five  miles  away.  The 
imprisoned  force  had  found  an  escape  at  last,  and  a 
new  source  of  wealth  was  given  to  Western  Pennsyl- 
vania, already  far  too  highly  favoured,  I  suppose  my 
readers  will  be  disposed  to  say.  After  four  pipes,  each 
two  inches  in  diameter,  had  been  laid  from  the  mouth 
of  the  well,  and  the  flow  directed  through  them,  the 


268  THE   EMPIRE   OF    BUSINESS 

gas  was  ignited,  and  the  whole  district  was  Hghted  up 
for  miles  around.  This  valuable  fuel  was  permitted 
to  waste  for  five  years,  as  capitalists  could  not  be 
found  who  were  willing  to  risk  the  40,000/.  (about$20o,- 
000)  for  pipes  to  convey  it  to  the  factories  and  mills 
where  it  could  be  utilized. 

I  visited  this  region  last  week  and  saw  nine  wells 
furnishing  gas.  The  gas  from  the  three  largest  was 
still  passing  into  the  air.  These  are  wonderful  sights 
indeed.  The  gas  rushes  up  with  such  velocity  through 
a  six-inch  pipe,  which  extends  perhaps  twenty  feet 
above  the  surface,  that  it  does  not  ignite  within  six 
feet  of  the  mouth  of  the  pipe.  Looking  up  into  the 
clear  blue  sky  you  see  before  you  a  dancing  golden 
fiend  without  visible  connection  with  the  earth,  swayed 
by  the  wind  into  fantastic  shapes,  and  whirling  in 
every  direction.  As  the  gas  from  the  well  strikes  the 
centre  of  the  flame,  and  passes  partly  through  it,  the 
lower  part  of  the  mass  curls  inward,  giving  rise  to  the 
most  beautiful  effects,  gathered  into  graceful  folds 
at  the  bottom,  a  veritable  pillar  of  fire.  There  is  not 
a  particle  of  smoke  from  it. 

Already  four  distinct  pipe  lines,  two  of  them  eight 
inches  in  diameter,  convey  the  gas  from  this  district 
to  manufacturing  establishments  in  Pittsburg,  and 
a  fifth  line  conveys  it  to  our  Bessemer  steel  mills,  nine 
and  ten  miles  distant.  Another  line  of  ten-inch  pipe 
is  being  laid. 


NATURAL    OIL    AND    GAS    WELLS       269 

The  cost  of  piping  is  now  estimated  at  the  present 
extremely  low  prices,  with  right  of  way,  at  1,500/. 
sterling  (about  $7,500)  per  mile,  so  that  the  cost  of  a 
line  to  Pittsburg  may  be  said  to  be  about  27,000/. 
sterling  (about  $135,000).  The  cost  of  drilling  is 
about  1,000/.  (about  $5,000),  and  the  mode  of  pro- 
cedure as  follows:  A  derrick  being  first  erected,  a 
six-inch  wrought  iron  pipe  is  driven  down  through 
the  soft  earth  till  rock  is  reached,  from  75  to  100  feet. 
Large  drills,  weighing  from  three  to  four  thousand 
pounds,  are  now  brought  into  use;  these  rise  and  fall 
from  four  to  five  feet  a  stroke.  The  fuel  necessary 
to  run  these  drills  is  conveyed  by  small  pipes  from 
adjoining  wells.  An  eight-inch  hole  having  been 
bored  to  a  depth  of  about  500  feet,  a  5  5-8-inch  wrought 
iron  pipe  is  put  down  to  shut  off  the  water.  The  hole 
is  then  continued  six  inches  in  diameter  until  gas  is 
struck,  when  a  four-inch  pipe  is  then  put  down.  From 
forty  to  sLxty  days  are  consimied  in  sinking  the  well 
and  striking  gas.  The  largest  well  known  is  estimated 
to  yield  about  30,000,000  cubic  feet  of  gas  in  twenty- 
four  hours,  but  half  of  this  may  be  considered  as  the 
product  of  a  good  well.  The  pressure  of  the  gas  as  it 
issues  from  the  mouth  of  the  well  is  nearly  or  quite 
200  pounds  per  square  inch.  One  of  the  gauges  which 
I  examined  showed  a  pressure  of  187  pounds.  Even 
at  our  works,  where  we  use  the  gas,  nine  miles  from 
the  well,  the  pressure  is  75  pounds  per  square  inch. 


2  70  THE   EMPIRE   OF    BUSINESS 

At  one  of  the  wells,  where  it  was  desirable  to  have  a 
supply  of  pure  water,  I  found  a  small  engine  worked 
by  the  direct  pressure  of  the  gas  as  it  came  from  the 
well,  and  an  excellent  supply  of  water  was  thus  ob- 
tained from  a  spring  in  the  valley. 

There  are,  of  course,  various  theories  as  to  the  loca- 
tion and  extent  of  the  gas  belt.  Enough  wells  have 
already  been  bored  in  the  Murraysville  district  to  in- 
dicate that  it  is  about  half  a  mile  wide,  and  extends 
in  a  southeasterly  direction  from  Murraysville  for  five 
or  six  miles.  The  wells  bored  beyond  this  encountered 
a  flow  of  salt  water  in  such  great  quantities  as  to 
nearly  drown  out  the  gas;  for  while  some  gas  came 
to  the  surface  it  was  not  in  sufficient  quantities  to 
render  it  valuable,  and  merely  proved  its  existence. 
Experts  have  therefore  concluded  that  while  the  gas 
exists  in  such  wells,  it  is  under  a  basin  of  saltwater. 
Several  wells  have  been  bored  in  the  city  of  Pitts- 
burg and  the  vicinity,  but  the  same  trouble  from 
salt  water  has  been  encountered  there.  A  geological 
friend  informs  me  that  the  stratum  dips  about  6,000  feet 
near  Pittsburg,  and  his  theory  is  that  this  depres- 
sion has  been  filled  with  salt  water,  and  hence  the 
attempts  in  that  district  have  proved  unsuccessful. 
Whether  deeper  boring  or  some  plan  of  shutting  out 
the  water  will  overcome  this  difficulty  is  yet  to  be  seen. 
Northwest  from  Murraysville  but  little  has  been  done 
to  prove  the  extent  of  the  gas  belt.     So  much  for  the 


NATURAL    OIL   AND    GAS    WELLS       271 

Murraysville  district,  which  is  to-day  furnishing  most 
of  the  gas  consumed  in  Pittsburg. 

If  any  of  my  readers  will  take  a  map  of  Western 
Pennsylvania  and  follow  the  Alleghany  river  some 
twenty  miles  from  Pittsburg,  they  will  find  the  town 
of  Tarentum,  which  is  the  centre  of  the  second  gas 
district.  Several  large  wells  have  been  found  there, 
and  it  is  quite  probable  that  future  developments  will 
reveal  a  territory  somewhat  like  the  Murraysville. 
A  well  recently  struck  compares  favourably  with  those 
in  the  latter  region.  Capitalists  have  recently  ar- 
ranged to  bring  this  gas  in  pipes,  laid  in  the  bed  of  the 
river,  to  Pittsburg;  and  I  have  no  doubt  that  by  the 
end  of  the  year  these  lines  will  be  in  operation,  and  the 
Tarentimi  district  giving  us  a  large  amount  of  gas. 

I  now  come  to  the  third  district,  of  which  the  county 
town  of  Washington  (Pennsylvania),  is  the  centre, 
which  is  situated  about  twenty-five  miles  south  of 
Pittsburg.  I  drove  out  to  this  region,  stopping  over 
night  at  a  friend's  house,  twelve  miles  from  the  wells. 
These  had  been  ignited,  and  the  whole  sky  was  bril- 
liantly illuminated  by  them.  It  seemed  to  us,  although 
such  a  distance  away,  as  if  a  great  conflagration  was 
raging.  The  next  morning  we  drove  to  the  wells. 
A  pipe  line  has  already  been  laid,  and  takes  the  pro- 
duct of  one  of  these  wells  to  the  iron  mills  along  the 
bank  of  the  Oliio  at  Pittsburg,  and  two  more  pipe 
lines  are  already  under  contract.     What  we  saw  here 


272  THE   EMPIRE   OF    BUSINESS 

was  very  similar  to  that  seen  in  the  Murray sville  dis- 
trict, except  that  the  gas  was  led  from  the  mouths  of 
the  wells  in  pipes  along  the  groimd,  instead  of  being 
shot  upright  into  the  air.  Looking  down  from  the 
road-side  upon  the  first  well  we  saw  in  the  valley, 
there  appeared  to  be  an  immense  circus  ring,  the 
verdure  having  been  burnt,  and  the  earth  baked  by 
the  flame.  The  ring  was  quite  round,  as  the  wind 
had  driven  the  flame  in  one  direction  after  another, 
and  the  effect  of  the  great  golden  flame  lying  prone 
upon  the  earth,  swaying  and  swirling  with  the  wind 
in  every  direction,  was  most  startling.  The  great 
beast  ApoUyon,  minus  the  smoke,  seemed  to  have 
come  from  his  lair  again. 

America  is  generally  supposed  to  be  the  land  which 
receives  emigrants,  but  the  movement  of  man  to  and 
fro  over  the  whole  earth  is  fast  becoming  more  and 
more  general.  The  Anglo-Saxon  race  grows  restless 
ever3nvhere.  As  I  stopped  to  climb  the  fence  to  go 
down  to  this  fiery  monster,  my  eye  caught  sight  of 
the  following  hand  bill: 

"PUBLIC     SALE. 
"The  undersigned,  going  to  move  to  Australia,  will  sell  at  public 
sale  on  Thursday, 

September     25, 
at  his  residence  on  what  is  known  as  the  Mrs.  Andrew  Carlisle  farm, 
one  and  one-half  miles  east  of  Hickory,  on  the  Hickory  and  Wash- 
ington road,  his  entire  stock  of 

Household  and  Kitchen  Furniture, 
consisting  of  Bureaus,  Bedsteads,  Bedding,  Chairs,  Tables,  Dishes, 
Cooking  Stove,  in  fact  everything  I  have  got.     Sale  to  commence 
at  I  o'clock,  prompt,  when  terms  will  be  made  known. 

William  Tiplady. 
A.  W.  Cummins,  Auctioneer," 


NATUI^VL    OIL    AND    GAS    WELLS       273 

Now  what  on  earth  takes  Mr.  Tiplady  from  this 
beautiful  region,  one  of  the  finest  agricultural  districts 
in  the  whole  of  America — takes  him  just  as  unex- 
pected treasures  are  found  to  exist  below  him;  which 
are  bound  to  produce  unwonted  activity  in  the  dis- 
trict, and  give  every  man  a  fair  opportunity  to  do 
more  than  well?  Many  reasons  were  suggested,  but 
the  most  likely  one  was  that  he  had  kin  in  Australia, 
and  had  determined  to  end  his  days  among  them. 
The  name  had  never  been  heard  by  any  of  us,  but  it 
is  similar  to  many  of  the  compoimd  names  which  we 
had  been  so  much  struck  with  in  our  recent  coaching 
tour  through  south-western  England,  so  that  we  thought 
he  must  be  from  the  motherland.  One  brother  had 
probably  left  the  old  home  for  the  antipodes,  while 
another  sought  the  shelter  of  the  RepubHc.  Truly 
our  race  are  the  true  nomads,  and  wander  over  the 
earth,  knowing  no  rest. 

Laying  our  hands  upon  the  vibrating  pipe  at  the 
well — and  it  takes  strong  nerves  to  approach  so  near 
to  the  screaming  roar  and  the  swirling  flame,  and 
stand  there — we  were  surprised  at  its  icy  coldness. 
At  one  well,  where  a  wooden  covering  had  been  placed 
over  the  valves,  a  beautiful  coating  of  ice,  not  less  than 
an  eighth  of  an  inch  thick,  caused  by  condensation, 
covered  the  pipe.  New  wells  are  being  put  down, 
and  it  is  evident  that  Washington  County  is  destined 
to  supply  its  quota  of  the  gas    used    in    Pittsburg. 


2  74  THE   EMPIRE   OF    BUSINESS 

Thus,  upon  three-fourths  of  a  complete  circle  sur- 
rounding the  city  of  Pittsburg,  at  a  distance  of  from 
fifteen  to  twenty  miles,  gas  is  already  proved  to  exist 
in  large  quantities,  only  waiting  for  escape  from  its 
home  beneath  the  sandrock. 

Now,  as  to  the  commercial  aspect  of  natural  gas. 
The  first  question  naturally  is.  How  long  will 
it  last? 

Friends  who  are  best  acquainted  with  the  oil  territory, 
with  which  natural  gas  has  much  in  common,  assure 
me  that  twenty  years  will  not  see  the  present  known 
territory  exhausted.  That  we  have  discovered  all 
the  gas  territory  is  not  to  be  believed ;  on  the  contrary, 
it  is  highly  probable  that  the  break  in  the  belt  near 
Pittsburg  is  merely  a  local  fault,  and  that  south- 
west of  Pittsburg  the  belt  will  be  foimd  to  extend 
for  many  miles.  It  will  probably  be  the  story  of  the 
oil  region  over  again.  Month  after  month  the  cry  has 
gone  forth  that  the  earth  cannot  stand  this  depletion. 
Not  only  rivers  but  seas  of  oil  will  be  exhausted  when 
drained  at  the  rate  of  70,000  barrels  per  day.  Specu- 
lators step  in  at  intervals,  and  buy  millions  of  barrels 
of  oil,  certain  that  the  supply  must  diminish;  and  yet 
every  successive  speculation  cripples  or  ruins  its  pro- 
moters. Petroleum  at  2/.  (about  $10)  per  barrel 
was  considered  cheap,  then  at  i/.  ($5.00),  and  at  4s. 
($1.00),  it  was  almost  given  away;  yet  to-day  (1885) 
it  can  be  bought  for  2s.  lod.   (about  seventy  cents), 


NATURAL    OIL    AND    GAS    WELLS       275 

and  the  supply  is  greater  than  ever.     It  promises  to 
be  much  the  same  with  natural  gas. 

In  the  manufacture  of  glass,  of  which  there  is  an 
immense  quantity  made  in  Pittsburg,  I  am  informed 
that  gas  is  worth  much  more  than  the  cost  of  coal  and 
its  handling,  because  it  improves  the  quality  of  the 
product.  One  firm  in  Pittsburg  is  already  making 
plate-glass  of  the  largest  sizes,  equal  to  the  best  im- 
ported French  glass,  and  is  enabled  to  do  so  by  this 
fuel.  In  the  manufacture  of  iron,  and  especially  in 
that  of  steel,  the  quality  is  also  improved  by  the  pure 
new  fuel.  In  our  steel  rail  mills  we  have  not  used  a 
pound  of  coal  for  more  than  a  year,  nor  in  our  iron 
mills  for  nearly  the  same  period.  The  change  is  a 
startling  one.  Where  we  formerly  had  ninety  fire- 
men at  work  in  one  boiler-house,  and  were  using  400 
tons  of  coal  per  day,  a  visitor  now  walks  along  the  long 
row  of  boilers  and  sees  but  one  man  in  attendance. 
The  house  being  whitewashed,  not  a  sign  of  the  dirty 
fuel  of  former  days  is  to  be  seen,  nor  do  the  stacks 
emit  smoke.  In  the  Union  Iron  Mills  our  puddlers 
have  whitewashed  the  coal-bunkers  belonging  to  their 
furnaces.  Most  of  the  principal  iron  and  glass  estab- 
lishments in  the  city  either  are  to-day  (January,  1885) 
using  this  gas  as  fuel,  or  are  making  preparations  to 
do  so.  The  cost  of  coal  is  not  only  saved,  but  the 
great  cost  of  firing  and  handling  it;  while  the  repairs 
to  boilers  and  grate  bars  are  much  less. 


276  THE   EMPIRE   OF    BUSINESS 

The  following  extract  from  the  report  of  a  com- 
mittee, made  to  the  American  Society  of  Mechanical 
Engineers  at  a  recent  meeting,  gives  an  idea  of  the 
value   of  the  new  fuel. 

"Natural  gas,  next  to  hydrogen,  is  the  most  power- 
ful of  the  gaseous  fuels,  and  if  properly  applied,  one 
of  the  most  economical,  as  very  nearly  its  theoretical 
heating  power  can  be  utilized  in  evaporating  water. 
Being  so  free  from  all  deleterious  elements,  notably 
sulphur,  it  makes  better  iron,  steel  and  glass  than  coal 
fuel.  It  makes  steam  more  regularly,  as  there  is  no 
opening  of  doors  and  no  blank  spaces  are  left  on  the 
grate  bars  to  let  cold  air  in,  and,  when  properly  ar- 
ranged, regulates  the  steam  pressure,  leaving  the  man 
in  charge  nothing  to  do  but  to  look  after  the  water, 
and  even  that  could  be  accomplished  if  one  cared  to 
trust  to  such  a  volatile  water  tender.  Boilers  will  last 
longer,  and  there  will  be  fewer  explosions  from  un- 
equal expansion  and  contraction  due  to  cold  drafts 
of  air  being  let  in  on  hot  plates. 


"An  experiment  was  made  to  ascertain  the  value 
of  gas  as  a  fuel  in  comparison  with  coal  in  generating 
steam,  using  a  retort  or  boiler  of  forty-two  inches 
diameter,  ten  feet  long  with  four-inch  tubes.  It  was 
first  fired  with  selected  Youghiogheny  coal,  broken 
to  about  four-inch  cubes,  and  the  furnace  was  charged 


NATURAL    OIL    AND    GAS    WELLS       277 

in  a  manner  to  obtain  the  best  results  possible  with  the 
stack  that  was  attached  to  the  boiler.  Nine  pounds 
of  water  evaporated  to  the  pound  of  coal  consumed 
was  the  best  result  obtained.  The  water  was  meas- 
ured by  two  meters — one  in  the  suction  and  the  other 
in  the  discharge.  The  water  was  fed  into  a  heater  at 
a  temperature  of  from  60°  to  62°;  the  heater  was 
placed  in  the  flue  leading  from  the  boiler  to  the  stack 
in  both  gas  and  coal  experiments.  In  making  the 
calculations  the  standard  seventy-six  pound  bushel 
of  the  Pittsburg  district  was  used.  Six  hundred  and 
eighty-four  pounds  of  water  were  evaporated  per  bushel 
which  was  60.9  per  cent,  of  the  theoretical  value  of  the 
coal.  Where  gas  was  burned  under  the  same  boiler, 
but  with  a  different  furnace,  and  taking  one  pound  of 
gas  to  the  23.5  cubic  feet,  the  water  evaporated  was 
found  to  be  20.31  pounds  or  83.4  per  cent,  of  the 
theoretical  heat  units  were  utilized.  The  steam  was 
under  the  atmospheric  pressure,  there  being  a  large 
enough  opening  to  prevent  any  back  pressure;  the 
combustion  of  both  gas  and  coal  was  not  hurried.  It 
was  found  that  the  lower  row  of  tubes  could  be  plugged, 
and  the  same  amount  of  water  could  be  evaporated 
with  the  coal ;  but  with  gas,  by  closing  all  the  tubes 
Con  the  end  next  the  stack),  except  enough  to  get  rid 
of  the  products  of  combustion,  when  the  pressure  on 
the  walls  of  the  furnace  was  three  ounces,  and  the 
fire  forced  to  its  best,  it  was  found  that  very  nearly 


2  78  THE   EMPIRE   OF    BUSINESS 

the  same  results  could  be  obtained.  Hence  it  was 
concluded  that  the  most  of  the  work  was  done  on  the 
shell  of  the  boiler." 

The  only  analyses  of  this  natural  fuel  which  have 
yet  been  made  or  published  are  those  by  our  chief 
chemist,  Mr.  Ford.  These  are  from  samples  of  the 
gas  taken  from  the  pipe  as  it  enters  our  steel  rail  mills, 
after  it  has  travelled  nine  miles  from  the  wells, 

Mr.  Ford  writes  me  as  follows: 


"Enclosed  find  four  of  my  latest  analyses,  which  were  made  the 
same  day  the  samples  were  procured.  At  present  these  investi- 
gations are  but  in  embryo.  I  wish  whenever  I  can  do  so  without 
interfering  with  the  work  at  the  laboratory  of  the  steel  works,  to 
take  samples  from  different  gas  wells,  and  make  a  collection  of  their 
salts.  I  think  I  have  discovered  some  very  interesting  facts  in 
regard  to  these  salts,  but  it  would  be  most  unwise  at  the  persent 
time  to  give  expression  to  my  opinions  upon  this  subject,  since  as 
yet  I  have  had  no  time  or  opportunity  to  go  to  the  different  wells 
and  make  a  collection  of  their  salts,  and  by  that  means  confirm 
my  first  impression. 

"My  discovery  of  the  fact  that  natural  gas  varies  in  its  chemical 
composition  from  time  to  time  will  be  rather  startling  to  some, 
and  it  will  open  a  new  field  for  thought.  I  wished  before  these 
results  were  made  public  to  ascertain  whether  the  gas  from  other 
wells  changed  as  does  this  from  the  Murray sville,  and  should  the 
gas  from  some  wells  vary  whilst  that  of  others  remains  constant, 
the  question  naturally  arises  which  class  of  well  will  prove  the 
more  lasting.  This  fact  of  the  variation  of  the  gas  from  the  same 
well  will  certainly  throw  some  new  light  upon  the  subject  of  the 
generation  of  this  material,  and  if  I  may  dare  say  it,  possibly  some 
additional  light  as  well  upon  the  subject  of  petroleum.  Having 
had  all  the  points  in  view,  I  have  refrained  from  publishing  my 
results  until  I  should  have  my  opinions  confirmed  and  reconfirmed 
by  numerous  analyses.  Hoping  that  these  analyses  will  be  of  use 
to  you. 

"  I  am,  &c., 

"S    A.  Ford." 


NATURAL    OIL    AND    GAS    WELLS       279 


Analyses  of  Natural  Gas. 


Carbolic  Acid. . 

Oxygen 

Oleriant  Gas. .  . 
Carbonic  Oxide 

Hydrogen 

Marsh  Gas 

Nitrogen 


Gas  of 


Percent. 

Nil. 
60 
80 
40 

51 

40 

429 


Gas  of 


Gas  of 


Gas  of 


Per  cent. 
61 

40 
61 
61 

2975 
68  01 
Nil. 


Percent. 

•81 

•61 

■81 

•81 

294 

9402 

Nil. 


Percent. 

Nil. 
•61 
•61 
•40 

19-67 

7872 

Nil. 


Gas  of 


Percent 

■67 
290 

2'4S 

312 
3152 

3997 
i9'3S 


Mr.  Ford's  investigations  are  the  only  ones  made 
so  far  as  I  know,  and  my  readers  have  in  them  all  that 
is  yet  determined  about  natural  gas. 

How,  where  and  upon  what  scale  natural  gas  is 
generated  in  the  regions  below  must  be  a  matter  for 
conjecture.  This  much  is  clearly  proved,  that  the 
gas  is  found  in  every  direction  around  Pittsburg  ex- 
cept the  north-west,  that  the  gas  belt  is  about  half 
a  mile  wide  near  Murraysville ;  but  this  is  not  to  be 
assumed  as  the  true  limits  of  the  supply,  for  even  as  I 
write  news  comes  of  a  large  well  having  been  struck 
at  Canonsburgh,  which  is  about  eight  miles  from  the 
wells  which  I  visited  in  Washington  County;  and  be- 
sides this  a  new  region  west  of  Canonsburgh  has  been 
recently  proved,  the  gas  from  which  is  now  used  in 
the  manufacturing  establishments  at  Beaver  Falls, 
Pa.,  twenty-five  miles  west  of  Pittsburg. 

We  may,  therefore,  reasonably  conclude  that  Pitts- 
burg   is  the  centre  of    a  gas    supply  covering  many 


28o 


THE   EMPIRE   OF    BUSINESS 


square  miles,  and  capable  of  producing  all  the  gas  that 
can  be  used  within  her  limits  during  the  present  gen- 
eration, both  for  manufacturing  and  domestic  uses. 
By  the  end  of  this  year  eight  pipe  lines  will  be  convey- 
ing it  to  the  city,  and  still  the  supply  of  gas  already 
obtained  and  now  going  to  waste  will  exceed  the 
capacity  of  these  lines.  Two  of  these  have  pipes  55-8 
inches  in  diameter,  four  are  of  8-inch,  one  is  of  lo-inch. 
and  another  of  1 2  inches  in  diameter. 

Many  theories  are  advanced  to  account  for  the  ex- 
istence of  this  fuel,  but  the  most  reasonable  one  is  that 
given  me  by  Prof.  Dewar,  of  Cambridge,  who  recently 
visited  us,  and  who  was  deeply  impressed  by  what  he 
saw  of  this  new  mine  of  wealth.  He  holds  that  the 
gas  is  being  constantly  distilled  from  the  oil,  or  from 
immense  beds  of  matter  which  are  slowly  being  changed 
to  oil,  and,  therefore,  that  long  after  the  oil  region 
has  ceased  to  give  oil  in  paying  quantities,  we  shall 
still  have  an  abundant  supply  of  gas ;  for  the  shallower 
the  deposit  of  oil,  the  more  favourable  will  be  the  con- 
ditions for  rapid  distillation.  Instead  of  occupying 
the  bad  eminence,  therefore,  of  being  by  far  the  dirti- 
est city  in  the  world,  which  it  undoubtedly  is  to-day, 
it  is  probable  that  the  other  extreme  may  be  reached, 
and  that  we  may  be  able  to  claim  for  smoky  Pittsburg 
that  it  is  the  cleanest  city.  However  this  may  be,  I 
think  that  few  will  be  disposed  to  dispute  that,  sur- 
rounded by  such  resources  as  I  have  attempted  to 


NATURAL    OIL   AND    GAS    WELLS       281 

describe,  Pittsburg  is  to-day,  as  far  as  subterranean 
treasures  are  concerned,  the  metropolis  of  the  richest 
district  in  the  known  world. 


Note. — So  prodigal  has  been  the  use  and  so  great  the  waste  of 
this  natural  fuel  (since  this  article  was  written)  that  even  the 
apparently  inexhaustible  has  become  precious  because  of  its  scarcity, 
and  the  gas  that  flared  through  the  waste  pipes  and  lighted  the 
streets  of  the  little  towns  with  flames  five  feet  high  is  now  meas- 
ured by  meter;  doled  out  by  the  thousand  cubic  feet. 


The  Three-Legged  Stool 

Scheme  of  the  world's  work.  The  triple  alliance 
of  labour,  capital  and  business  ability  are  necessary 
to  produce  successfully.  Each  dependent  on  the 
others — combined,  invincible. 


THE   THREE-LEGGED    STOOL 

SCHEME  OF  THE  WORLD'S  WORK 

THERE  is  a  partnership  of  three  in  the  indus- 
trial world  when  an  enterprise  is  planned.  The 
first  of  these,  not  in  importance  but  in  time,  is  Capital. 
Without  it  nothing  costly  can  be  built.  From  it  comes 
the  first  breath  of  life  into  matter,  previously  inert. 

The  structures  reared,  equipped  and  ready  to  begin 
in  any  line  of  industrial  activity,  the  second  partner, 
comes  into  operation.  That  is  Business  Ability. 
Capital  has  done  its  part.  It  has  provided  all  the 
instrumentalities  of  production ;  but  unless  it  can  com- 
mand the  ser\'ices  of  able  men  to  manage  the  business, 
all  that  Capital  has  done  crumbles  into  ruin. 

Then  comes  the  third  partner,  last  in  order  of  time 
but  not  least,  Labour.  If  it  fails  to  perform  its  part, 
nothing  can  be  accomplished.  Capital  and  Business 
Ability,  without  it  brought  into  play,  are  dead.  The 
wheels  cannot  revolve  unless  the  hand  of  Labour  starts 
them. 

Now,  volumes  can  be  written  as  to  which  one  of  the 
three  partners  is  first,  second  or  third  in  importance, 

From   The  New  York  Journal,  1900. 

285 


286  THE   EMPIRE   OF    BUSINESS 

and  the  subject  will  remain  just  as  it  was  before.  Po- 
litical economists,  speculative  philosophers  and  preach- 
ers have  been  giving  their  views  on  the  subject  for 
hundreds  of  years,  but  the  answer  has  not  yet  been 
found,  nor  can  it  ever  be,  because  each  of  the  three 
is  all-important,  and  every  one  is  equally  essential 
to  the  other  two.  There  is  no  first,  second  or  last. 
There  is  no  precedence !  They  are  equal  members  of 
the  great  triple  alliance  which  moves  the  industrial 
world.  As  a  matter  of  history  Labour  existed  before 
Capital  or  Business  Ability,  for  when  "Adam  digged 
and  Eve  span  "  Adam  had  no  capital  and  if  one  may 
judge  from  the  sequel  neither  of  the  two  was  inordi- 
nately blessed  with  business  ability,  but  this  was  before 
the  reign  of  Industrialism  began  and  huge  investments 
of  Capital  were  necessary. 

In  our  day,  Capital,  Business  Ability,  Manual  Labour 
are  the  legs  of  a  three-legged  stood.  While  the  three  legs 
stand  sound  and  firm,  the  stool  stands;  but  let  any 
one  of  the  three  weaken  and  break,  let  it  be  pulled 
out  or  struck  out,  down  goes  the  stool  to  the  ground. 
And  the  stool  is  of  no  use  until  the  third  leg  is  re- 
stored. 

Now,  the  capitalist  is  wrong  who  thinks  that  Capital 
is  more  important  than  either  of  the  other  two  legs. 
Their  support  is  essential  to  him.  Without  them, 
or  with  only  one  of  them,  he  topples  over. 

Business  Ability  is  wrong  when  it  thinks  that  the 


THE    THREE-LEGGED    STOOL  287 

leg  which  it  represents  is  the  most  important.  With- 
out the  legs  of  Capital  and  Labour  it  is  useless. 

And  last,  let  it  not  be  forgotten  that  Labour  also 
is  wrong,  wildly  wrong,  when  it  assumes  that  it  is  of 
more  importance  than  either  of  the  other  two  legs. 
That  idea  has  been  in  the  past  the  source  of  many  sad 
mistakes. 

The  three  are  equal  partners  of  a  grand  whole. 
Combined  they  work  wonders;  separate,  neither  is  of 
much  account.  Thus  far,  notwithstanding  the  differ- 
ences that  from  time  to  time  have  unfortimately  rent 
them  apart,  they  have  made  the  closing  century  the 
most  beneficent  of  all  that  have  preceded  it.  Human- 
ity, the  world  over,  is  better  than  it  has  ever  been, 
materially  and  morally,  and  I  have  the  faith  that  it 
is  destined  to  reach  still  higher  and  loftier  planes  than 
even  the  most  sanguine  have  imagined. 

Capital,  Business  Ability  and  Labour  must  be 
tmited.  He  is  an  enemy  to  all  three  who  seeks  to 
sow  seeds  of  disunion  among  them. 

[First  spoken  as  part  of  an  address  to  the  men  at  Homestead  upon 
the  opening  of  the  Library  Hall  and  Workingmens'  Club  presented 
to  the  employees  there  by  Mr.  Carnegie. 


Railroads  Past  and  Present 


Railroading  in  the  seventies;  rails,  systems,  speeds, 
salaries  and  methods.  Railroading  in  the  future. 
The  needs  of  the  railroadman  and  his  responsibilities. 


RAILROADS    PAST    AND    PRESENT 

IT  is  a  matter  of  great  satisfaction  and  some 
pride  to  me  that  I  began  in  the  railroad  service 
as  telegraph  operator  and  rose  to  the  position 
of  superintendent  of  the  Pittsburg  Division  of  the 
Pennsylvania  Railroad.  Perhaps  it  would  be  inter- 
esting to  contrast  in  a  few  particulars  the  condition 
of  affairs  in  the  railroad  world  then  and  now.  We 
are  always  urged  to  look  well  ahead  in  railroading. 
It  is  one  of  the  chief  rules,  but  it  is  also  well  to  cast  a 
look  back  and  see  the  progress  that  has  been  made. 

When  I  had  the  honour  to  become  a  railroad  man, 
the  Pennsylvania  Railroad  was  not  yet  finished  to 
Pittsburg.  By  means  of  some  miles  of  staging  be- 
tween two  points,  and  a  climb  over  the  mountains 
by  means  of  ten  inclined  planes,  the  passenger  was 
enabled  to  reach  Philadelphia  by  rail.  The  rails  on 
the  mountains  were  iron,  fourteen-feet  lengths,  im- 
ported from  England,  lying  on  huge  hewn  blocks  of 
stone,  although  the  line  passed  through  woods  and 
ties  would  have  cost  little.  The  company  had  no 
telegraph  line  and  was  dependent  upon  the  use  of  the 
Western  Union  wire.  Mr.  Scott,  the  superintendent, 
the  celebrated  Thomes  A.  Scott  who  was  afterward 

From  a  Speech  delivered  to  a  gathering  of  Railroad  Men  in  New 
York,  January,  1902. 

291 


292  THE   EMPIRE   OF   BUSINESS 

president,  often  came  to  the  telegraph  office  in  Pitts- 
biirg  to  talk  to  his  superior  in  Altoona,  the  General 
Superintendent.  I  was  then  a  young  operator  and 
made  his  acquaintance  by  doing  this  telegraphing  for 
him. 

I  was  receiving  the  enormous  salary  of  twenty-five 
dollars  per  month  then,  and  he  offered  me  thirty-five 
to  become  his  secretary  and  telegrapher,  which  meant 
fortune.  Let  me  congratulate  you  upon  the  great 
advance  in  your  own  wages  and  salaries  since  then 
Mr.  Scott  received  $125  a  month — $1,500  a  year,  and 
my  wonder  was  what  a  man  could  do  with  that  amoimt 
of  money.  I  hadn't  thought  then  of  one  use — he 
might  succeed  by  giving  part  of  it  away.  What  are 
the  advantages  a  man  receives  from  wealth  is  often 
discussed,  but  the  best  of  wealth  is  not  what  it  does 
for  the  owner  but  what  it  enables  him  to  do  for  others. 
I  served  for  some  time  before  I  received  an  advance 
of  salary  of  ten  dollars  per  month.  That  gave  me  an 
enormous  revenue  compared  with  the  $1.20  a  week 
at  which  I  started  in  the  cotton  factory. 

It  is  one  of  the  most  cheering  facts  of  our  day  that 
tmder  present  conditions  the  wages  of  labour  tend 
to  rise,  and  the  price  of  the  necessaries  of  life  tend  to 
faU.  There  never  was  a  nation  so  splendidly  situated 
as  ours  is  at  this  moment  in  regard  to  labour.  Every 
sober,  capable  and  willing  man  finds  employment  at 
wages  which  with  thrift  and  a  good  wife  to  manage 


RAILROADS   PAST  AND   PRESENT       293 

will  enable  him  to  go  far  toward  laying  up  a  compe- 
tence for  old  age.  Those  so  fortunate  as  to  be  mar- 
ried know  how  much  depends  upon  a  wife  who  can 
manage  your  household  affairs  and  those  who  are  not 
yet  married  will  find  that  out.  There  is  nothing  that 
the  success  and  happiness  of  a  workingman  so  much  de- 
pends upon,  next  to  his  own  good  conduct,  as  a  good 
managing  wife.  And  here  let  one  who  has,  almost 
without  intention  or  desire,  had  himself  loaded  with 
somewhat  more  than  a  competence  tell  soberly  that 
what  one  has  beyond  this  brings  little  with  it,  and 
sometimes  nothing  desirable  with  it;  what  all  should 
strive  for  is  a  competence,  without  which  Junius  has 
wisely  said  no  man  could  be  happy.  No  man  should 
be  happy  without  it,  if  it  be  within  reach,  and  I  urge 
everyone  to  save  part  of  their  earnings  these  prosper- 
ous days  and  put  in  savings  bank  at  interest,  or  better 
still,  buy  a  home  with  it. 

But  to  revert  to  railroading.  President  Thomson 
one  day  amazed  the  community  of  Pittsburg  by 
stating  that  on  some  future  day  the  Pennsylvania 
Railroad  would  transport  100  cars  a  day  over  it.  Cars 
then  carried  eight  tons  net.  We  had  small  locomo- 
tives and  the  roadbed  was  something  to  frighten  one. 
It  was  laid  with  light  rails  and  cast-iron  joints  were 
used.  I  have  known  47  broken  joints  found  one 
morning  in  winter  on  my  division,  and  it  was  over 
such  a  line  that  we  ran  our  trains.     It  is  no  wonder 


294  THE    EMPIRE   OF    BUSINESS 

that  breakdowns  were  frequent.  We  had  no  cabooses 
on  freight  trains.  Trainmen  had  to  be  out  in  all 
weathers.  It  was  single  track,  and  not  having  a 
telegraph  line,  in  case  of  delays  trains  ran  curves; 
that  is,  a  flagman  went  ahead  and  the  train  followed 
and  met  when  they  could,  and  sometimes  met  with 
considerable  force,  on  the  sharp  curves.  There  is 
nothing  apparently  takes  so  long  to  learn  by  the 
average  railroad  man  as  this  proposition,  that  two 
trains  cannot  pass  each  other  successfully  on  a  single 
track.  We  never  did  quite  learn  that  lesson,  even 
on  the  Pittsburg  Division. 

Being  a  telegrapher  I  took  charge  of  our  own  rail- 
road telegraph  wire  when  it  was  constructed,  and  I 
believe  that  I  placed  the  first  young  woman  telegraph 
student  at  work  on  a  railroad;  so  I  see  it  stated.  In 
those  days  the  superintendent  had  to  do  everything; 
there  was  no  division  of  responsibilities.  It  was 
supposed  that  no  subordinate  could  be  trusted  to  run 
trains  by  telegraph  or  attend  to  a  wreck,  and  Mr. 
Scott  and  I,  his  successor,  were  two  of  the  most  foolish 
men  I  have  ever  known  in  this  respect.  We  went 
out  to  every  wreck,  worked  all  night ;  often  I  was  not 
at  home  for  a  week  at  a  time,  scarcely  ever  sleeping, 
except  a  few  snatches,  lying  down  in  a  freight  car.  I 
now  look  back  and  see  what  poor  superintendents  we 
were ;  but  I  had  a  great  example  in  Mr.  Scott.  It  took 
me  some  time  to  learn,  but  I  did  learn,  that  the  su- 


RAILROADS    PAST   AND   PRESENT       295 

premely  great  managers,  such  as  you  have  these  days, 
never  do  any  work  themselves  worth  speaking  about  ; 
their  point  is  to  make  others  work  while  they  think. 
I  applied  this  lesson  in  after  Hfe,  so  that  business  with 
me  has  never  been  a  care.  My  young  partners  did 
the  work  and  I  did  the  laughing,  and  I  commend  to 
all  the  thought  that  there  is  very  little  success  where 
there  is  little  laughter.  The  workman  who  rejoices 
in  his  work  and  laughs  away  its  discomforts  is  the 
man  sure  to  rise,  for  it  is  what  we  do  easily,  and  what 
we  Hke  to  do,  that  we  do  well.  When  you  see  a  presi- 
dent or  superintendent  or  a  treasurer  loaded  down 
with  his  duties,  oppressed  with  care,  with  a  counte- 
nance as  serious  as  a  judge  uttering  a  death  sentence, 
be  sure  that  he  has  more  responsibility  than  he  is  fit 
for  and  should  get  relief. 

Compare  the  speed  of  trains  for  instance.  On  the 
great  Pennsylvania  Railroad  we  thought  that  we  had 
reached  perfection  when  a  passenger  train  was  put  on 
which  ran  between  Pittsburg  and  Philadelphia  in  13 
hours,  about  27  miles  an  hour.  It  was  christened  the 
"Lightning  Express."  That  was  not  because  we 
thought  the  lightning  was  so  slow,  but  because  we 
thought  the  train  was  so  terrifically  fast.  To-day 
the  Empire  State  Express  is  run  at  double  this  speed, 
which  holds  the  world's  record.  But  do  not  let  us 
make  the  mistake  again  of  thinking  that  we  have 
reached    perfection.     The    next    generation    will    run 


296  THE    EMPIRE   OF    BUSINESS 

trains  at  a  hundred  miles  an  hour,  double  the  present 
speed,  just  as  trains  are  run  at  double  the  speed  of  30 
years  ago.  The  line  will  be  straight.  In  the  language 
of  Scripture,  "the  crooked  places,"  that  is  the  curves, 
"shall  be  made  straight." 

In  the  improvements  made  to-day  on  the  various 
lines  I  don't  think  many  managers  look  far  enough 
ahead.  They  are  spending  on  some  parts  perhaps 
half  a  million  dollars  where  they  ought  to  spend  double, 
and  easing  the  curves  which  they  should  abolish,  and 
some  future  president  is  to  say  that  they  wasted  a 
good  deal  of  money.  Nothing  but  a  straight  line  will 
be  up  to  date  in  1950,  or  before  that. 

But  there  is  another  department  in  which  progress 
has  been  as  great,  and  even  of  greater  importance 
than  in  that  which  has  been  referred  txD.  It  is  in  the 
care  of  railroad  employes,  their  position,  their  ad- 
vantages, their  earnings,  and  in  the  pension  system 
which  the  leading  railroads  of  this  country  feel  them- 
selves obligated  to  establish,  that  those  who  labour 
year  after  year  at  stated  salaries  and  have  no  pros- 
pect of  making  great  gains  should  at  least  have  this 
consolation  in  view,  that  in  their  old  age  they  will  be 
able  to  live  in  comfortable  independence,  not  as  a 
matter  of  charity,  but  by  virtue  of  their  own  exertions, 
and  what  they  are  entitled  to  as  a  bonus  for  faithful 
service  rendered.  I  know  of  nothing  which  lifts  and 
improves  the  service  of  a  great  line  and  adds  so  much 


RAILROADS   PAST  AND   PRESENT       297 

to  its  safety  as  a  staff  which  can  rest  in  the  knowledge 
that  after  they  have  grown  old  in  the  service  their 
old  age  is  made  comfortable  through  the  system  of 
pensions.  Before  long  no  line  will  rank  as  in  the 
front  rank  which  has  not  this  invaluable,  I  might 
almost  say  necessary  element  in  securing  a  staff  of 
trustworthy,  intelligent,  and  loyal  men  filled  with 
esprit  de  corps  for  the  company  they  serve.  In  the 
buildings  now  being  provided  at  transfer  stations, 
in  the  reading  rooms  and  libraries,  and  in  some  cases, 
especially  on  the  Santa  Fe  route,  I  learn  billiard  tables 
and  other  means  of  harmless  and  needful  entertain- 
ment are  provided.  Last,  but  not  least,  in  such  build- 
ings and  societies  which  draw  men  together  for  their 
good,  in  all  these  improvements,  and  in  many  other 
ways  we  have  evidence  that  employers  are  recog- 
nizing their  duties  to  the  employed  more  clearly  than 
in  the  past. 

The  railroad  man  is  to  be  congratulated  also  upon 
this  fact,  that  wherever  improving  agencies  have 
been  established  the  men  have  endeavored  to  show 
their  appreciation  by  using  them  to  the  fullest  extent. 
Railway  companies  can  make  no  better  use  of  money 
than  in  establishing  additional  institutions  of  this 
kind  and  enlarging  those  which  already  exist  and 
are  crowded.  It  will  be  that  company  which  does 
most  for  its  men  in  the  direction  indicated  which  will 
do  best  for  its  shareholders,  and  on  the  other  hand 


298  THE    EMPIRE   OF    BUSINESS 

it  will  be  upon  that  line  the  workingman  will  feel  most 
at  home,  and  in  which  they  will  take  the  greatest 
pride,  and  for  which  they  will  be  most  williag  to  incur 
the  exhausting  labour  and  danger  incident  to  the 
railroad  man's  calling,  thus  giving  another  proof  that 
their  interest  and  the  interest  of  those  whose  capital 
is  invested  are  not  antagonistic,  but  mutual.  It  is  a 
great  delusion  to  say  that  labour  and  capital  are  foes, 
they  must  be  allies,  or  neither  succeeds.  I  have  be- 
fore used  the  simile  of  likening  Capital,  Business 
Ability  and  Labour  to  the  legs  of  a  three-legged  stool ; 
the  stool  will  not  stand  up  without  the  support  of  all 
these  three  legs,  and  to  dispute  as  to  which  of  these 
three  is  most  important  is  useless.  It  can  never  be 
determined,  and  if  determined  it  would  be  of  little 
consequence,  since  the  great  fact  remains  that  they 
are  all  absolutely  necessary  for  such  success  as  we 
see  on  the  great  transportation  lines  of  our 
country. 

The  men  of  the  railroad  world  are  to  be  congratu- 
lated on  occupying  the  proud  position,  as  I  believe, 
of  the  most  temperate  body  of  employes  in  the  world. 
They  are  an  example  to  the  workingman  in  other 
branches  of  the  outspreading  tree  of  labour,  and 
their  influence  cannot  fail  to  prove  of  incalculable 
benefit.  No  rule  that  a  man  can  adopt  will  bring 
greater  reward  than  this,  to  abstain  from  the  use  of 
alcohol  as  a  beverage.     A  drinking  man  has  no  place 


R.MLROADS   PAST  AND   PRESENT       299 

in  the  railway   system.     Indeed   he   should   have   no 
place  anywhere. 

The  satisfactory  relations  which  exist  upon  the 
whole  between  the  railroads  and  their  men  should  be 
gratifying  to  them  both.  It  is  always  sure  to  be 
created  and  to  exist  where  the  officers  are  intelligent 
and  sympathetic,  and  feel  themselves  part  of  the  one 
organization  which  manages  the  line,  comprising  all 
employes  from  the  track  labourer  to  the  locomotive 
engineer  and  up  through  all  grades  to  the  president 
himself,  every  one  a  N.  Y.  C,  or  a  P.  R.  R.,  or  a  C,  B. 
&  Q.,  or  a  D.,  L.  &  W.  man. 

There  is  no  room  for  antagonism  upon  a  railroad 
between  employer  and  employe,  for  the  president 
and  superintendent  do  not  own  the  property  any 
more  than  the  employes  do,  therefore,  all  are  as  just 
said,  members  of  the  same  corps;  all  are  equally  the 
servants  of  the  company.  The  official,  therefore, 
recognizes  in  the  train  man,  the  road  man,  or  the 
engineer,  employes  like  himself  to  whom  he  must 
naturally  feel  the  glow  of  comradeship,  while  they 
cannot  but  regard  the  officials  as  their  fellow  members 
and  feel  that  in  all  matters  of  compensation  or  dis- 
cipline, what  their  fellow  members  in  office  prescribe 
has  not  for  its  end  their  own  self-aggrandizement, 
but  the  successful  operation  of  the  line. 

There  is  another  feature  of  cheering  import.     The 
road  to  ])romotion  is  clear  and  direct.     All  can  certify 


300  THE   EMPIRE   OF   BUSINESS 

to  that;  for,  I  doubt  not,  many  of  those  now  in  au- 
thority began  in  subordinate  positions  and  have  won 
their  way  by  merit,  not  by  favour.     Every  man  in  the 
Railway  Industrial  Army,   as   Napoleon    said  of  his 
army,    carries   a   marshal's   baton    in    his    knapsack. 
Upon    railroaders    there   rest    grave    responsibilities; 
they  have  in  their  keeping  the  lives  of  the  public,  I 
need  not  say  the  travelling  public,    for   with  us  all 
travel.     Strict  sobriety,  unceasing  vigilance,  staunch 
courage,  faithfulness  to  duty,  are  demanded  of  them, 
and  that  these  are  characteristic  of  the  force  is  testi- 
fied at  recurring  intervals  and  by  the  position  they 
have  reached  and  occcupy  in  the  estimation  of  their 
grateful  fellow  citizens. 


Iron  and  Steel  at  Home  and 
Abroad 

Conditions  of  the  iron  trade  in  the  United  States  and 
abroad  compared.     The  future  of  these  metals. 


IRON    AND    STEEL     AT     HOME    AND 
ABROAD 

BRITAIN,  hitherto,  has  been  able  to  make  and 
market  steel  cheaper  than  Germany ;  (Germany 
now  leads  Britain  6,000,000  tons  to  5,000,000)  there- 
fore, she  had  the  lead  in  Europe.  She  had  the  lead  in 
the  world.  But  her  position  has  become  artificial. 
She  cannot  make  coke  under  $2.50  a  ton.  It  costs 
about  $3.00  a  ton  at  the  steel  works.  She  cannot 
maintain  even  her  present  supply  of  ore.  It  is  be- 
coming more  and  more  costly  to  get.  She  has  de- 
pended largely  on  the  Bilbao  mines  of  Spain,  but  that 
ore  has  deteriorated  in  value,  and  the  owners  will  no 
longer  guarantee  the  quality.  British  manufacturers 
must  take  it  as  it  comes,  and  year  after  year  it  is 
bound  to  get  scarcer.  In  this  condition  of  affairs  it 
is  not  possible  for  Britain  to  make  steel  as  cheap  as 
we  can  make  it  in  Pittsburg  and  send  it  to  Britain. 
Besides,  Britain  and  other  foreign  nations  have  be- 
come our  dumping  ground  for  surplus,  which  means 
more  than  the  uninitiated  would  suspect.  The  Car- 
negie Steel  Company  are  making  over  200,000  tons 
of  steel  a  month,  and  President  Schwab  said  to  me 
the  other  day  that  he  believed  in  a  short  time  a  third 
of  it  would  go  abroad. 

From   The  Iron  Age,  1898. 


304  THE    EMPIRE   OF    BUSINESS 

The  position  of  Germany  is  also  largely  artificial. 
Of  course,  they  have  a  high  protective  duty.  The 
manufacturers  are  able,  therefore,  by  combinations 
to  get  a  big  price  in  the  home  market.  This  enables 
them  to  ship  abroad  and  sell  very  cheaply.  They, 
too,  are  trying  to  make  the  world  their  dumping 
ground.  But  there  is  this  difference:  The  prices 
charged  to  the  consumer  in  Germany  limit  the  con- 
sumption. The  extraordinarily  cheap  prices  prevail- 
ing here — 3  pounds  of  steel  for  2  cents — increase  con- 
sumption. Germany's  foundation  is  on  sand.  I  am 
a  staunch  protectionist,  but  only  when  we  have  reason 
to  believe  that  by  temporary  protection  we  can  furnish 
the  consumer  the  supply  of  any  given  article  better 
and  cheaper  than  he  has  ever  been  able  to  purchase 
it  abroad.  If  we  cannot  do  that  I  do  not  believe  in 
protecting.  If  we  can  do  it  I  do  believe  in  protecting, 
Germany  abandons  that  sound  economic  doctrine,  and 
is  protecting  for  the  sake  of  protection,  and  the  German 
consumer  gets  no  benefit.  This  is  false  political 
economy. 

There  is  only  one  thing  needed  to  further  expand 
our  export  trade  in  iron  and  steel  and  that  is  regular 
lines  of  steamships  to  the  various  parts  of  the  world. 
We  can  never  hope  to  have  such  facilities  as  Britain, 
because  Britain  imports  so  much  of  bulky  goods  from 
various  parts  of  the  world  which  we  fortunately  grow 
at  home.     Therefore,  Britain's  ships  get  return  car- 


IRON  AND  STEEL  AT  HOME  AND  ABROAD  305 

goes,  and  the  rates  will  be  cheaper.  But  even  this 
disadvantage  we  can  overcome  in  the  lower  cost  of  our 
manufactures.  If  we  could  restore  to  the  United 
States  its  rightful  position  as  the  shipbuilder  of  the 
world  our  attention  would  soon  be  directed  to  the  es- 
tabHshing  of  regular  steamship  lines,  and  this  obstacle 
would  fade  away.  Even  now  the  export  trade  is  be- 
coming of  such  magnitude  as  to  justify  several  new 
steamship  lines,  as  you  see,  and  we  will  conquer  by 
and  by.  I  have  been  urging  the  importance  of  a  ship- 
building yard  in  New  York,  and  it  is  bound  to  come. 
Capital  will  see  that  there  is  a  good  chance  for  it,  since 
steel  and  wood  work  are  both  cheaper  in  New  York 
than  in  Belfast  and  on  the  Clyde.  It  will  not  take 
long  before  capital  is  attracted. 

Our  present  shipyards  being  prosperous  will  ex- 
tend, but  there  is  plenty  of  room  for  a  good  shipyard 
in  New  York.  It  is  rather  humiliating  to  see  the 
St.  Paul  and  the  St.  Louis,  the  New  York  and  the 
Paris  following  each  other  to  Southampton  to  be 
docked  there,  there  being  no  dock  in  the  great  port 
of  New  York  capable  of  holding  these  small  ships 
Yes,  small  ships,  I  came  over  in  the  Kaiser  Fried- 
rich,  made  in  Germany.  After  you  travel  on  a  ship 
like  that  you  can  never  think  of  anything  else  We 
had  a  rough  passage,  the  roughest  I  have  ever  known, 
and  yet  the  most  comfortable. 

The   consolidation   of   the   iron   and    steel    interests 


3o6  THE   EMPIRE   OF   BUSINESS 

is  a  natural  evolution.  If  we  are  going  to  sell  3  pounds 
of  steel  for  2  cents,  it  must  be  made  by  the  millions 
of  tons.  It  is  a  tight  race  for  the  best  of  concerns. 
Review  the  record  during  the  past  few  years  of  every 
one  of  the  large  steel  companies  the  results  of  whose 
business  has  become  public  property  through  their 
annual  reports,  or  whose  properties  have  been  in  the 
hands  of  a  receiver.  The  result  will  show  that  selling 
3  pounds  of  steel  for  2  cents  troubles  the  best  of  them. 
Therefore,  concerns  that  are  losing  money  seek  con- 
solation somewhere,  and  consolidation  is  something 
like  Mesopotamia,  a  very  comforting  word.  Do  not 
tmderstand  me  as  reflecting  on  the  management  of 
these  concerns.  Very  far  from  it.  It  is  not  the 
management  but  the  situation.  Steel  cannot  be 
made  and  sold  as  low  as  it  has  been  ruling  without 
involving  loss  to  all  these  concerns. 

Consolidation  is  wise  and  necessary.  It  is  a  step 
in  the  right  direction.  The  steel  manufacturer  must 
reconcile  himself  to  making  a  very  small  shaving  of 
profit  per  ton.  When  a  concern  makes  2,500,000 
tons  per  annum  it  does  not  need  much  per  ton  to  keep 
the  wolf  from  the  door,  especially  if  it  has  no  bonded 
debt. 

While  the  consumption  of  iron  and  steel  is  enor- 
mous, yet  prices  do  not  rise.  I  do  not  believe  that 
we  can  increase  consumption,  therefore  I  argue  that 
the  capacity  to  manufacture  is  beyond  our  legitimate 


IRON  AND  STEEL  AT  HOME  AND  ABROAD  307 

requirements.  If  it  had  been  otherwise  we  would 
have  seen  a  great  boom  in  prices,  which,  however, 
remain  low.  Indeed,  too  low  for  our  friends  to  make 
even  a  fair  return. 

Railroads  are  exceedingly  prosperous,  especially  in 
the  West.  There  is  little  fear  that  all  the  rails  that 
can  be  made  will  find  a  market.  Another  thing,  the 
use  of  beams  will  grow  in  this  country  if  the  price  is 
kept  down  to  the  present  rate.  At  the  present  time 
a  little  country  like  Germany  uses  three  times  the 
amount  of  beams  that  the  United  States  does.  In 
Germany  no  one  thinks  of  building  an  ordinary  house 
without  making  it  fireproof.  Here  the  millionnaire 
builds  his  house  fireproof,  although  I  know  of  several 
millionnaires  who  have  recently  erected  fire  traps.  No, 
the  ordinary  house  in  the  United  States  will  in  the 
near  future  be  made  fireproof,  as  it  is  in  Germany. 
At  the  present  time,  however,  the  whole  amount  of 
structural  material  consumed  in  the  United  States 
could  be  made  by  the  Carnegie  Steel  Company.  It  is 
a  very  trifling  business,  but  it  is  an  index  to  the  possi- 
bilities of  the  greater  uses  and  increased  consumption 
of  steel  and  iron. 


The  Manchester  School  and 
To-day 

The  British  contention  that  each  nation  is  specially 
qualified  for  but  one  general  branch  of  indrustry  dis- 
cussed and  combatted. 


THE    MANCHESTER    SCHOOL 
AND    TO-DAY 

WHILE  Ex- Premier  Rosebery  was  recently  laud- 
ing the  triumphs  of  the  Free  Trade  Manchester 
School  at  Manchester,  Foreign  Minister  Goluchowski, 
in  Vienna,  was  beseeching  the  nations  of  Europe  to 
combine  against  the  destructive  competition  with 
Trans-Oceanic  countries:  "We  must  fight  shoulder  to 
shoulder  against  the  common  danger,"  he  exclaims, 
"and  arm  ourselves  for  the  struggle  with  all  the  means 
at  our  disposal."  "European  nations  must  close 
ranks  in  order  successfully  to  defend  their  existence." 
Thus  do  extremes  meet,  and  we  see  once  more  how 
much  depends  upon  the  point  of  view.  Had  the  pre- 
dictions of  the  Manchester  School  been  realized,  cheaper 
goods  from  across  the  seas  would  be  hailed  as  an  econo- 
mic gain,  and  a  blessing  to  the  recipients,  instead  of 
being  considered  a  menace  to  their  existence.  Every 
port  would  be  open  to  this  influx  of  goods,  and  the  new 
countries  which  supplied  them  hailed  as  benefactors, 
for  "Free  exchange  of  commodities"  was  the  watch- 
word, but  it  was  un-(lrcamt  of  then  that  the  commodi- 

From    The  Nineteenth  Cmtury.   February,  1898. 


312  THE   EMPIRE   OF   BUSINESS 

ties  of  the  new  lands  sent  to  the  old  might  take  the 
form  of  competing  manufactured  articles,  which  makes 
all  the  difference. 

Sixty  years  ago  steam  upon  land  and  upon  sea — 
the  steamship  and  the  railway  train — began  their 
revolutionary  work,  Britain,  their  creator,  situated 
upon  beds  of  coal  and  ironstone,  being  naturally  the 
scene  of  their  development.  The  world  was  a  mere 
looker-on  while  she  harnessed  steam  and  began  to 
change  it.  If  any  other  country  wished  to  avail  itself 
of  the  advantages  of  the  new  inventions,  to  Britain 
it  must  go  for  every  thing  connected  therewith.  Brit- 
ain had  realized  her  destiny,  and  was  soon  to  become 
the  workshop  of  the  world. 

There  appeared  upon  the  scene  the  Manchester 
School — Villiers,  Cobden,  Bright,  and  their  colleagues — 
demanding  on  behalf  of  the  masses  that  the  taxes  upon 
food  should  be  repealed.  The  repeal  of  these  taxes 
which  passed  under  the  name  of  "Free  Trade"  in 
Britain,  in  contradistinction  to  "Protection,"  has 
little  to  do  with  the  modem  doctrine  of  Protection, 
as  it  is  now  known  in  other  countries.  Such  taxes 
could  never  have  been  defended  by  the  Protectionist 
of  to-day,  because  it  was  impossible  that  the  amount 
of  food-products  could  thereby  be  considerably  in- 
creased. The  only  sound  defence  for  a  protective 
duty,  according  to  the  cosmopolitan  protectionist, 
is  when  it  can  be  justly  claimed  that  to  levy  it  for  a. 


THE  MANCHESTER  SCHOOL  AND  TO-DAY  313 

time  will  so  stimulate  home  production  of  the  article 
taxed  as  to  supply  the  wants  of  the  nation ;  and,  further, 
that  home  competition  will  then  soon  result  in  the 
nation  obtaining  a  surer,  cheaper,  and  better  supply 
from  within  its  own  domain  than  it  ever  did  or  could 
do  from  foreign  sources. 

A  tax  levied  imder  these  conditions  is  endorsed  by 
John  Stuart  Mill's  celebrated  paragraph,  which  John 
Bright  once  said  to  the  writer  "would  cause  hereafter 
more  injury  to  the  world  than  all  his  writings  would 
do  good,"  and  is  also  recognized  as  sound  or  unsound 
by  Marshall,  according  to  circiimstances,  and  is  what 
is  meant  in  our  day  by  "  Protection  "  outside  of  Britain. 

Conditions  connected  with  this  tax  have  in  no  wise 
changed,  and  therefore  the  work  of  the  Manchester 
School  stands.  Such  a  tax  imposed  upon  food  to-day 
would  operate  precisely  as  it  did  before,  imless  by  some 
marvellous  discovery  the  soil  of  Britain  can  be  made  to 
grow  an  abundance  of  food  for  the  wants  of  its  inhabi- 
tants. A  temporary  tax  then,  if  necessary,  to  induce 
capital  to  develop  the  new  process  would  be  justifiable. 

For  the  reason  stated,  the  modem  advocate  of  Pro- 
tection denounces  as  strenuously  as  any  Com  Law 
Repealer  the  tax  upon  food  in  Britain. 

The  wonderful  success  of  these  British  inventions, 
the  steamship  and  the  train,  and  tlie  profits  resulting 
from  the  command  of  the  world's  manufacturing 
which   these   inventions   gave,   coupled   with   the   un- 


314  THE   EMPIRE   OF    BUSINESS 

doubted  advantages  flowing  from  the  free  importa- 
tion of  food  products,  had  the  natural  result  of  creat- 
ing the  most  sanguine  views  of  the  future  position  and 
prosperity  of  the  United  Kingdom,  and  the  successful 
apostles  of  the  Manchester  School  were  above  all  men 
justifiably  the  most  sanguine,  and  this  was  the  lesson 
they  drew  from  the  then  existing  conditions : 

Nature  has  decreed,  and  wisely  so,  that  all  nations  of  the  earth 
shall  be  interdependent,  each  with  a  mission.  To  one  is  given 
fertile  soil,  to  another  rich  mines,  to  a  third  great  forests;  to  one 
sunshine  and  heat,  to  another  temperate  zone,  and  to  another 
colder  clime;  one  nation  shall  perform  this  service,  another  that, 
and  a  third  shall  do  something  else;  all  co-operating,  each  furnish- 
ing its  natural  product,  forming  one  grand  harmonious  whole. 

How  beautiful  the  picture !  Then  followed  the 
second  postulate: 

It  is  clearly  seen  that  to  our  beloved  land.  Great  Britain,  has 
been  assigned  the  high  mission  of  manufacturing  for  her  sister 
nations.  Our  kin  beyond  the  sea  shall  send  to  us  in  our  ships 
their  cotton  from  the  Mississippi  valley;  India  shall  contribute  its 
jute,  Russia  its  hemp  and  its  flax,  Australia  its  finer  wools,  and  we, 
with  our  supplies  of  coal  and  ironstone  for  our  factories  and  work- 
shops, our  skilled  mechanics  and  artificers,  and  our  vast  capital, 
shall  invent  and  construct  the  necessary  machinery,  and  weave 
these  materials  into  fine  cloth  for  the  nations;  all  shall  be  fashioned 
by  us  and  made  fit  for  the  use  of  men.  Our  ships  which  reach 
us  laden  with  raw  materials  shall  return  to  all  parts  of  the  earth 
laden  with  these  our  higher  products  made  from  the  crude.  This 
exchange  of  raw  for  finished  products  under  the  decrees  of  nature 
makes  each  nation  the  servant  of  the  other,  and  proclaims  the 
brotherhood  of  man.  Peace  and  goodwill  shall  reign  upon  the 
earth,  one  nation  after  another  must  follow  our  example,  and  free 
exchange  of  commodities  shall  everywhere  prevail.  Their  ports 
shall  open  wide  for  the  reception  of  our  finished  products,  as  ours 
are  open  for  their  raw  materials. 

Such  the  beliefs,  the  hopes — the  not  unreasonable 


THE  MANCHESTER  SCHOOL  AND  TO-DAY  315 

hopes,  judging  from  their  premises — of  the  Manchester 
School;  for  let  it  be  said,  in  justice  to  these  good  and 
great  men,  that  the  picture  they  drew,  and  which  we 
have  endeavored  to  portray,  was  realized.  Great  Bri- 
tain did  become  the  workshop  of  the  world,  and  each 
of  the  great  nations  played  the  role  prescribed  and 
performed  the  services  indicated.  No  nation,  not 
even  the  American,  ever  made  such  progress  or  accu- 
mulated such  wealth  upon  products  manufactured  as 
Britain  did  in  this  stage  of  her  history.  The  pros- 
pectus of  the  Barrow  Steel  Company  stated  that  profits 
had  been  30  and  40  per  cent,  per  annum,  and  in  one 
year  they  had  reached  the  incredible  rate  of  60  per 
cent,  upon  the  entire  capital.  This  is  only  straw 
showing  the  unheard-of  returns  made  by  the  manu- 
facturers of  Britain  when  the  world  was  at  its  feet, 
and  before  strenuous  competition  had  reduced,  and 
in  many  cases  banished,  profits.  And  well  deserved 
was  the  reward  reaped  by  the  nation,  great  as  it  was, 
which  had  given  steam  to  the  world,  inaugurated  the 
age  of  machinery,  and  made  the  world  its  debtor  for 
all  time. 

The  law  of  Nature  as  interpreted  by  the  Manchester 
School  was  revealed  in  the  supposed  facts  that  the 
resources  of  the  various  countries  of  the  earth  greatly 
differed,  the  capabilities  of  the  men  and  women  thereof 
not  less  so,  and  that  manufacturing  could  be  success- 
fully  conducted    only    in    Orcat    Britain.     That    tool- 


3i6  THE    EMPIRE   OF    BUSINESS 

steel,  or  indeed  any  kind  of  steel,  much  less  fine  ma- 
chinery, could  be  made  except  there — that  the  finest 
woollen,  linen,  and  cotton  cloth  could  be  produced 
successfully  in  new  lands — were  suggestions  which  at 
that  day  were  not  even  hinted,  but  which,  if  they  had 
been  made,  would  have  been  greeted  with  derision. 

It  is  unreasonable  to  suppose  that  these  able  men 
of  the  Manchester  School  would  ever  have  assumed 
that  the  principal  nations  of  the  earth,  or  those  as- 
piring to  become  such,  would  contentedly  play  the 
subordinate  part  assigned  them  had  the  manufactur- 
ing field  been  open  to  them.  The  very  keynote  of 
the  Manchester  structure  was  necessarily  that  the 
various  nations  were  restricted  by  nature  to  play  the 
role  of  growers  of  raw  materials,  no  other  being  possi- 
ble. We  find  to-day,  on  the  contrary,  after  a  period 
of  enforced  acquiescence,  that  nations  with  rare  una- 
nimity have  aspired  to  share  the  higher  task  of  fash- 
ioning their  raw  materials  into  finished  products  for 
themselves,  and  neither  British  capital  nor  skill  has 
been  wanting  to  insure  their  success.  Indeed,  it  is 
chiefly  owing  to  these  that  competition  with  their  own 
country  has  been  rendered  possible  in  the  Far  East. 
So  far  from  the  resources  of  nations  being  generally 
meagre  and  unsuitable  for  manufacturing,  or  their 
people  incapable,  as  the  Manchester  School  assume^, 
the  success  of  their  manufacturing  efforts,  generally 
speaking,  has  been  surprising.     Germany  has  become 


THE  MANCHESTER  SCHOOL  AND  TO-DAY  317 

one  of  the  largest  manufacturing  countries.  France 
and  Switzeriand  have  almost  monopolized  the  silk 
manufacture  in  Europe.  Russia  is  engaged  in  build- 
ing steel  and  engineering  works  under  the  supervision 
of  the  most  skilled  American  constructors;  two  of 
these  establishments,  now  well  forward,  rival  the  best 
works  of  America,  after  which  they  are  copied.  Japan 
and  China  are  building  factories  of  the  latest  and  most 
approved  character,  always  with  British  machinery 
and  generally  under  British  direction.  Mexico  is 
weaving  cotton  cloth,  manufacturing  paper,  and  two 
bicycle  factories  are  now  under  construction  there. 
The  jute  and  cotton  mills  of  India  are  numerous  and 
increasing,  and  Bombay  is  establishing  an  Engineering 
Works.  It  is  stated  that  one  British  manufacturing 
concern  sends  abroad  the  complete  machinery  for  a 
new  mill  every  week.  Of  America  it  is  unnecessary 
to  speak. 

Thus  every  nation  of  the  first  rank,  or  which  has  the 
elements  of  future  rank,  has  rejected  the  role  which 
the  Manchester  School  assigned  it,  and  aspires  to 
manufacture  for  itself.  Political  Economy  now  points 
out  that  it  is  for  the  benefit  of  mankind  that  the  trans- 
portation charges  incurred  by  distance  between  pro- 
ducer and  manufacturer  should  be  saved.  Attempts 
to  manufacture  by  some  small  populations  in  certain 
directions  will  no  doubt  fail  and  be  abandoned,  1)ut 
success  in  the  main  seems  assured. 


3i8  THE    EMPIRE   OF    BUSINESS 

Some  lands,  notably  Germany  and  America,  not 
content  to  supply  their  own  wants,  now  appear  as  ex- 
porters of  many  competing  articles  to  other  countries, 
several  of  which  reach  the  United  Kingdom,  and  the 
experience  which  the  men  of  other  nations  have  long 
had  of  innumerable  articles  "made  in  Britain"  is  now 
being  brought  home  to  the  Briton,  and  it  is  found  that 
there  is  "a  good  deal  of  human  nature  in  him"  not 
differing  from  that  of  other  lands.  A  score  of  articles 
"made  in  Germany"  cause  him  irritation;  contracts 
given  to  American  manufacturers  for  engines  in  Lon- 
don, Dublin,  and  Edinburgh  are  not  approved.  Glas- 
gow rejects  an  American  bid  for  water-pipes,  and  gives 
it  to  Glasgow  manufacturers  at  a  higher  price.  When 
a  great  show  of  bicycles  takes  place  in  London,  no 
room  can  be  found  for  the  American.  Government 
contracts,  even  including  stationery,  must  be  filled 
by  home-made  articles.  Although  free  entrance  for 
importations  is  not  denied,  yet  when  purchases  are 
to  be  made — no  foreigner  need  apply.  The  mails 
must  go  by  slow  home-made  ships,  even  if  thereby 
delayed.  All  this  is  only  what  we  should  expect  and 
excuse.  He  is  a  poor  citizen  who  does  not  prefer  and 
patronize  his  own  country  rather  than  foreign  lands, 
but  the  Briton  should  expect  the  American,  and  Ger- 
man, and  others  to  be  equally  patriotic.  With  the 
same  feelings  with  which  he  regards  competing  articles 
**made  in  Germany"   or  America  invading  his  own 


THE  MANCHESTER  SCHOOL  AND  TO-DAY  319 

country,  let  him  realize  that  the  patriotic  German 
and  American  naturally  regard  competing  articles 
"made  in  Britain"  which  invade  theirs. 

To-day  it  is  seen  that  Nature  has  distributed  more 
generously  than  was  imagined  the  indispensable  min- 
erals, coal,  lime,  and  ironstone,  as  it  was  known  be- 
fore that  it  had  widely  distributed  the  ability  to  grow 
raw  materials;  and  that  it  has  endowed  the  man  and 
woman  of  most  countries  with  latent  ability,  sufficient 
under  the  new  conditions  to  manufacture  their  own 
raw  materials,  in  most  cases  not  so  well,  in  one  or  two 
special  lines  perhaps  as  well,  as  the  Briton  or  Ameri- 
can, and  that  hence  there  is  not  to  be  only  one  or  two 
but  many  principal  manufacturing  countries. 

The  wonderful  machinery,  mostly  of  British  inven- 
tion, especially  in  iron  and  steel,, and  in  textile  manu- 
factures, enables  the  Hindoo  of  India,  the  Paeon  of 
Mexico,  the  negro  of  America,  the  Chinaman  and  the 
man  of  Japan,  to  manufacture  with  the  more  carefully 
educated  workman  of  Britain  and  America.  The 
mechanical  skill  of  old  is  not  now  generally  required, 
but,  where  necessary  for  a  few  positions  in  each  huge 
factor}^  is  readily  obtained  from  the  older  manufac- 
turing lands. 

Automatic  machinery  is  to  be  credited  as  the  most 
potent  factor  in  rendering  non-essential  to  successful 
manufacturing  a  mass  of  educated  mechanical  labour 
such  as  that  di  Britain  or  America,  and  thus  making 


320  THE   EMPIRE   OF  -BUSINESS 

it  possible  to  create  manufacturing  centres  in  lands 
which,  until  recent  years,  seemed  destined  to  remain 
only  producers  of  raw  materials.  We  see  everywhere 
to-day  the  influence  of  this  new  machinery.  It  can  be 
accepted  as  an  axiom  that  raw  materials  have  now 
power  to  attract  capital,  and  also  to  attract  and  de- 
velop labour  for  their  manufacture  in  close  proximity, 
and  that  skilled  labour  is  losing  the  power  it  once  had 
to  attract  raw  materials  to  it  from  afar. 

This  is  not  change ;  it  is  revolution. 

The  ablest  and  best  citizens  of  every  country  are 
inspired  to  favour  the  development  of  its  resources. 
They  cannot  consider  it  right  to  hide  the  talents  given 
them,  and  are  now  enabled  to  see  clearly  that  the  evi- 
dent law  of  Nature  is  that  there  shall  be  given  to  many 
nations  the  blessings  of  diversified  industries,  in  the 
pursuit  of  which  the  various  aptitudes  and  talents  of 
their  people  shall  find  scope. 

All  this  the  Manchester  School  could  by  no  possi- 
bility have  foreseen. 

It  is  delightful  to  survey  the  movement  of  the  nations 
in  the  march  of  industrial  progress  under  the  new  con- 
ditions. Had  one  or  two  become  the  chief  manu- 
facturers for  all,  the  genius  of  their  people  alone  would 
have  been  enlisted  in  the  work  of  improvement  and 
invention.  To-day  we  have  the  genius  of  many 
nations  already  at  work,  with  more  to  come.  It  is 
pleasing  also  to  note  how  the  genius  of  each  tends  to 


THE  MANCHESTER  SCHOOL  AND  TO-DAY  321 

excel  ill  a  different  line.  Thus  P" ranee  has  almost 
monopolized  the  superfine  in  textiles,  as  it  has  long 
enjoyed  supremacy  in  the  department  of  women's 
rich  apparel.  Britain  holds  supremacy  in  machinery 
for  textiles.  The  inventor  of  the  iron  and  steel  in- 
dustry, she  is  also  leading  the  world  to-day  in  suc- 
cessfully developing  a  collateral  branch,  the  by-prod- 
uct coke  oven,  in  which  even  the  American  has  so  far 
failed.  America  leads  in  electrical  appliances  and 
machine  tools.  Germany  is  supreme  in  chemical 
dyes,  and  has  recently  invented  a  condenser  for  steam 
which  is  showing  great  results,aswellas  a  remarkable 
new  process  for  the  making  of  armour.  The  cause  of 
progress  in  things  material  is  thus  advanced  by  the 
contributions  of  many  minds  of  various  nationalities. 

The  stirring  competition  which  has  begun  among 
the  nations,  and  which  we  may  expect  to  see  still  more 
strenuously  pushed,  is  the  true  agency  for  producing 
the  best  results,  and  is  to  be  welcomed  and  encouraged 
by  those  who  can  lift  themselves  above  the  narrow 
view  of  what  is  seemingly  best  for  any  one  or  two  of 
the  geographical  divisions  of  the  world,  and  regard 
what  is  best  for  the  race  as  a  whole. 

The  development  of  the  industrial  world  is  taking 
a  different  line  from  that  predicted,  but  the  great  work 
accomplished  by  the  Manchester  School  is  neither  to 
be  belittled  nor  forgotten.  Villiers,  Cobden,  Bright, 
and  their  compeers,  in  the  repeal  of  the  taxes  upon 


32  2  THE   EMPIRE   OF    BUSINESS 

food  imports,  did  their  country  a  service  for  which  it 
can  never  be  too  grateful.  Their  devotion  to  the  cause 
of  peace,  and  to  all  that  tended,  as  they  thought,  to 
create  the  brotherhood  of  nations,  gives  the  leaders 
of  the  movement  a  secure  place  in  the  history  of  benefi- 
cent deeds,  and  as  advocates  of  noble  ends.  That 
some  of  their  predictions  are  nullified  or  reversed  by 
forces  which  have  come  into  play  since  their  day, 
neither  reflects  upon  their  sagacity  nor  detracts  from 
their  services. 

The  "  Free  Trade' '  which  Manchester  saw,  and  for 
which  it  predicted  universal  acceptance,  was  the  ex- 
change of  different  and  non-competing  articles,  and 
of  raw  materials  for  manufactured  goods;  for  nations 
had  not  then  begun  to  compete  seriously  with  each 
other  in  the  same  manufactured  articles.  If  this  is 
not  to  be  realized,  since  the  principal  nations  are  to- 
day becoming  manufacturers  of  their  raw  material, 
and  supplying  their  own  needs,  and  competing  with 
each  other  in  the  world's  market  for  similar  things, 
yet  we  may  congratulate  ourselves  that  something 
better  even  than  the  Manchester  ideal  for  the  progress 
of  the  world  is  rapidly  being  evolved. 

What  the  effect  of  this  change  is  to  be  upon  the 
relative  positions  of  nations  in  the  future  it  were  use- 
less to  consider,  since  conditions  might  be  transformed 
in  a  day ;  a  chemical  discovery,  an  electrical  invention, 
the  properties  of  a  plant  utilized — any  one  of  such, 


THE  MANCHESTER  SCHOOL  AND  TO-DAV  323 

or  of  other  not  improbable  surprises  upon  which  we 
seem  to  be  sometimes  on  the  very  threshold,  might 
work  an  entire  change.  The  substitution  of  beet  for 
cane  sugar  has  just  blighted  the  West  Indies,  which 
seemed  to  possess  almost  a  monopoly.  The  discovery 
of  the  Mesaba  Iron  Mines,  improved  transport,  and  a 
few  other  minor  causes  have  just  made  America  the 
cheapest  manufacturer  of  steel,  while  until  recently 
she  was  the  dearest.  The  basic  process  has  made 
Germany  a  leading  steel  producer,  when  otherwise 
she  seemed  destined  to  be  excluded,  and  promises  to 
tell  scarcely  less  heavily  for  Britain,  The  discovery 
of  mines  and  the  extension  of  its  railway  system  are 
soon  to  make  Russia  an  important  manufacturing 
country,  in  which  she  has  hitherto  failed.  The  utiliza- 
tion of  waterfalls  for  electricity,  displacing  coal,  is 
already  changing  some  centres  of  manufacture.  All 
these  changes  are  of  yesterday. 

It  is  not  wise,  therefore,  for  any  nation  to  plume 
itself  unduly  upon  present  resources  or  prospects, 
neither  for  any  to  despond.  "  We  know  not  what  a 
day  may  bring  forth." 


What  Would  I  Do  With  the 
Tariff  if  I  Were  Czar? 


The  advantage  of  taxing  the  imported  luxuries  heavily 
and  reducing  the  tax  on  raw  materials  and  necessities. 
A  few  striking  examples  of  correct  and  misapplied 
tariffs. 


WHAT   WOULD    I    DO    WITH    THE 
TARIFF    IF    I    WERE   CZAR? 

I  RATHER  like  the  swing  of  the  question,  and  I 
proceed  to  reply.  The  estimated  expenditure 
of  the  National  Government  according  to  Secretary- 
Carlisle's  report  for  the  present  fiscal  year  (1895) 
is  $424,000,000,  and  the  estimated  receipts  $404,000,- 
000,  leaving  a  deficit  of  $20,000,000.  He  estimates 
that  next  year  there  will  be  a  surplus  of  $30,000,000, 
assimiing  the  expenditure  to  be  the  same.* 

The  decrease  in  the  cost  of  pensions  this  fiscal  year 
over  last  is  no  less  than  $18,000,000,  and  very  soon 
every  year  the  percentage  of  decrease  must  become 
greater.  The  navy  will  require  less  expenditure 
upon  it  than  in  future  years,  and  the  increase  in  popu- 
lation and  wealth  will  give  increased  revenues  of 
themselves,  so  that  there  is  no  cause  for  alarm  in  re- 
gard to  the  expenditures  and  revenues  of  the 
Government  after  the  next  year,  although  the  Secre- 
tary is  probably  much  oversanguine  as  to  receipts 
under  present  laws  for  this  year. 

♦The  following  may  be  interesting  as  a  comparison:  In  1901 
the  total  revenue  was  $587,685,338  and  the  total  ordinary  ex- 
penditures $509,967,353,  leaving  an  excess  of  revenue  over  ordinary 
expenses  of  $77,7  1 7,985. 

From  The  Forum,  March,  189;. 

327 


328  THE   EMPIRE   OF    BUSINESS 

Of  Government  revenues,  the  tariff  is  estimated  to 
yield  $160,000,000  this  year,  and  is  estimated  to 
yield  $190,000,000  next  year;  and  the  question  is, 
What  would  I  do  about  the  tariff  if  I  had  supreme 
power  ? 

First,  my  aim  would  be  to  keep  free  of  duty  the 
necessaries  of  life  used  by  the  many,  and  to  tax  highly 
the  luxuries  of  the  few.  The  masses  who  wear  and 
consume  home  products  I  should  not  tax,  but  the 
luxurious  man  and  woman  of  fashion  who  will  wear 
at  whatever  cost  the  fine  woollens  and  the  exquisitely 
fine  silks  and  the  delicately  fine  linens  of  Europe 
should  pay  the  tariff  duties.  This  small  rich  class 
under  the  new  tariff  would  be  made  much  more  fash- 
ionable by  paying  perhaps  double  the  present  duties. 
The  American  masses  who  use  American  tobacco  and 
cigars  should  find  no  higher  tax  upon  these  than  at 
present;  but  the  rich  and  luxurious  gentlemen  whose 
delicate  nostrils  require  the  perfume  of  the  Havana, 
should  become  more  profitable  to  the  State  by  pay- 
ing at  least  double  the  present  duty.  The  champagne 
and  rare  old  wine  drinkers  and  purchasers  of  rare  old 
or  rare  new  foreign  china  and  glass,  perfumeries, 
and  similar  articles  de  luxe  should  be  able  to  boast 
with  perfect  truth  of  their  enhanced  value.  It  should 
never  be  forgotten  that  imported  articles  are  used  by 
the  rich  few,  and  home  products  by  the  masses. 

The  increased  duties  proposed  upon  foreign  articles 


WHAT  WOULD  I  DO  WITH  THE  TARIFF?  329 

de  luxe  would  not  be  levied  with  a  view  to  protection, 
but  purely  for  revenue.  That  incidentally  this  policy 
might  slightly  benefit  the  manufacturers  at  home 
would  not  be  considered  an  objection;  but  this  ad- 
vantage, if  any,  could  be  but  slight,  since  the  super- 
fine qualities  of  wool,  silk,  and  linen  goods  are  not 
made  here,  nor  are  the  high-priced  wines,  cigars, 
and  hundreds  of  fancy  articles  Home  manufacturers, 
however,  almost  completely  control  the  market  for 
goods  of  ordinar}'-  quality,  which  are  those  used  by 
the  masses. 

The  reverse  of  this  has  hitherto  been  the  policy 
adopted.  A  page  could  be  filled  with  a  list  of  the 
luxuries  of  the  rich  upon  which  the  taxes  have  been 
reduced  by  the  new  tariff.  Here  are  a  few  reductions : 
china  reduced  50  per  cent.,  glass-plate  and  stained 
glass  40  gold  pens  16,  clocks  28,  hats  72,  knit  fab- 
rics 72,  flannel  68,  silk  umbrellas  18,  brandy  and 
cordials  28,  silks  40,  gloves  30,  comfits,  jellies,  etc., 
laces,  embroideries,  etc.,  16,  woollens  and  silks  10  to 
20,  owing  to  ad  valorem  instead  of  specific  duties. 
Under  the  present  tariff  the  rich  man  of  fashion  wears 
his  superfine  foreign  broadcloth,  superfine  linen, 
silk  hat,  kid  gloves,  fine  silk  umbrella,  sips  his  costly 
glass  of  rare  old  wine,  from  20  to  70  per  cent,  less 
than  the  former  duty  upon  these  superfluous  luxur- 
ies. His  grand  dame  plays  her  fan,  flourishes  her 
embroidered      handkerchief,     displays     her     exquisite 


330  THE    EMPIRE  OF    BUSINESS 

laces,  and  arrays  herself  in  superb  silks  at  equal  re- 
ductions, with  many  smiles  and  thanks  to  the  newly 
arisen  friend  of  the  people,  the  charming  and  brilliant 
yoimg  West  Virginian,  who  apologizes  for  his  failure 
to  reduce  the  duties  upon  the  champagne  she  offers 
him,  explaining  that  this  was  not  his  fault  as  his  bill 
originally  provided  for  its  reduction  also.  Hundreds 
of  fancy  articles  made  of  wool,  silk  and  linen  are  now 
tinder  reduced  duties.  These  reductions,  as  we  shall 
see  later,  embrace  articles  de  luxe  which  furnish  two- 
thirds  of  the  entire  revenue  from  the  tariff.  Not  one 
workingman  in  the  whole  land  uses  these  luxuries. 
Such  is  "tariff  reform"  up  to  date,  and  thus  is  the 
"burden  of  taxation  removed  from  the  masses  of  the 
people."  Strange  delusion!  The  taxes  are  removed 
only  from  the  rich. 

This  is  not  a  party  question,  for  neither  party  has 
made  the  primary  object  of  the  tariff  the  collection 
of  the  revenue  from  the  luxuries  of  the  rich  regardless 
of  either  free  trade  or  protection.  A  proper  tariff 
would  replace  the  burden  upon  the  shoulders  of  those 
best  able  to  bear  it,  and  much  higher  rates  would  be 
imposed  upon  these  articles  than  have  ever  yet  been 
charged. 

It  is  a  mistake  to  assume  that  the  use  of  luxuries 
would  be  seriously  lessened  owing  to  higher  rates  of 
duties.  On  the  contrary,  one  element  of  fashionable 
use  is  great  cost.     The  imports  would  be  lessened  if 


WHAT  WOULD  I  DO  WITH  THE  TARIFF?  331 

duties  were  raised  upon  articles  of  general  consump- 
tion used  by  the  masses,  because  one  article  could  be 
substituted  for  another  and  the  cost  is  always  care- 
fully considered.     But  this  does  not  apply  strongly 
to  luxuries,  which  are  chiefly  matters  of  taste  and 
fashion  and  are  purchased  solely  by  the  rich,  to  whom 
price  is  not  the  first  consideration.     To  double  the 
tax  upon  champagne,  for  instance,  or  upon  fine  for- 
eign   china,    woollens,    silks,    linens,    laces,    embroid- 
eries, etc.,  would  not  greatly  deter  the  rich  class  from 
purchasing.     The  reduction  in  the  amount  consumed 
would  probably  not  much  more  than  equal  the  ordi- 
nary increase  arising  from  the  increase  of  population 
and    wealth.     The    amount    of    additional    duty    re- 
ceived,  therefore,    would   soon   be   substantially   the 
amount  imposed.     But  even  if  the  higher  taxes  re- 
duced the  use  of  the  foreign  products  one-fourth  for 
a  time,  the  revenues  would  still  be  one-fourth  more 
were   the   taxes   doubled.     Should,   however,   a   con- 
siderable   reduction    in    consumption    take    place,    so 
much   the  better.     There   is   a   silver   lining  to   that 
cloud,  for  so  much  more  of  the  wealth  of  the  country 
would  be  used  for  the  purchase  of  home  products,  or, 
at  least,  not  spent  in  luxurious  living.     It  might  be 
claimed   that  the  home  manufacturer  would   finally 
produce   the   finest   qualities   of  textile   goods   if  the 
foreign  goods  were  highly  taxed.     So  be  it,   and   so 
much  the  better  for  the  country  if  he  did ;  but  it  would 


332  THE   EMPIRE   OF    BUSINESS 

take  years  before  he  could  do  so,  and  long  before  this, 
the  natural  increase  of  the  revenues  from  increased 
population  and  wealth  would  meet  any  reduction  of 
imports.  In  a  few  years  the  decrease  in  pensions — 
the  great  drain  at  present — will  relieve  the  Govern- 
ment from  the  necessity  to  collect  as  much  revenue. 
Tariff  duties  as  follows  were  collected  in  1892  on 
foreign  importations  of  the  luxuries  of  the  rich: 

Wool  manufactures $32,293,609 

Silk  manufactures 16,965,637 

Cotton  manufactures 16,436,733 

Flax  manufactures 10,066,636 

Glass  and  china 10,339,000 

Wines,  liquors,  etc 8,935,000 

Tobacco  and  cigars 11,882,557 

Here  are  $106,000,000  of  revenue  from  seven  classes 
of  luxuries,  and  here  are  a  few  others  which  netted 
more  than  $8,000,000  additional — ^jewellery,  carriages, 
artificial  flowers,  clocks,  brushes,  paper,  perfumeries, 
musical  instruments — making  $114,000,000  revenue 
collected  from  imports  out  of  the  total  of  $177,000,000. 
To  reduce  duties  upon  articles  which  are  all  luxuries 
of  the  rich,  furnishing  two-thirds  of  the  whole 
tariff  revenue,  is  the  chief  result  of  the  Wilson  act. 

The  statement  cannot  be  disputed  that  these  articles 
were  not  imported  for  the  use  of  the  masses  of  the 
people.  With  woollen  manufactures,  as  those  of  silk, 
the  masses  of  the  people  of  the  United  States  are  sup- 
plied by  the  home  manufacturer  almost  exclusively. 


WHAT  WOULD  I  DO  WITH  THE  TARIFF  ?  3^3 

The  only  class  which  uses  imported  cloths,  and  for- 
eign glass  and  china,  and  foreign  wines  and  tobacco, 
is  the  rich.  To  prevent  the  charge  being  made  that 
the  articles  used  to  any  extent  by  the  masses  might 
be  made  dearer  by  the  increased  duties,  the  bill 
should  provide  that  woollen,  silk  and  linen  cloths 
of  common  grades  should  be  exempt  from  the  higher 
duties.  Substantially  none  but  the  high  grades  is 
imported,  but  this  clause  would  disarm  criticism. 
Had  even  the  duties  of  1892  been  retained  upon  these 
luxuries  of  the  few,  the  present  deficiency  in  the  reve- 
nues would  have  been  much  less  than  now  disturbs 
the  national  exchequer.  We  have  here  a  rich  mine, 
indeed,  which  should  be  drawn  from  when  the  next 
tariff  legislation  is  undertaken.  Were  the  duties 
upon  these  luxuries  doubled,  and  another  $114,000,- 
000  collected,  or  if  the  increased  taxes  diminished 
consumption  by  one-fourth  and  the  Government  ob- 
tained but  half  the  increase,  as  it  still  would  in  that 
extreme  case,  then  we  would  have  taken,  say,  $57,- 
000,000  of  taxation  from  the  shoulders  of  the  toiling 
masses  and  placed  it  upon  those  of  the  luxurious, 
pleasure-loving,  extravagant  class  who  can  be  made 
to  pay  for  their  extravagance  with  l)enefit  to  them- 
selves and  to  the  nation.  If  50  per  cent,  additional 
duty  were  tried,  the  revenues  would  soon  be  increased 
to  almost  the  whole  of  the  extra  tax.  This  is  neither 
protection  nor  free  trade,  and  has  nothing  to  do  with 


334  THE    EMPIRE   OF    BUSINESS 

either.  It  is  simply  a  question  of  revenue.  And 
it  is  submitted  that  in  no  way  can  the  necessary 
revenue  be  so  wisely  obtained  as  from  foreign  luxur- 
ies consumed  only  by  the  rich  and  most  extravagant 
class  of  the  people.  My  tariff  would  about  double 
present  duties  upon  all  these  luxuries. 

When  brought  face  to  face  with  the  fact  that  the 
principal  change  produced  by  the  Wilson  bill  was 
thus  to  reduce  duties  upon  two-thirds  of  the  total 
tariff  revenues  exclusively  for  the  benefit  of  the  rich, 
who  alone  use  imported  goods,  one  asks  how  so  able, 
honest,  zealous,  and  pure  a  man  as  Mr.  Wilson  could 
represent  himself  as  "lifting  the  imnecessary  burden 
of  onerous  tariff  taxation  from  the  masses  of  the 
people" — the  explanation  is  easy:  he  was  inexperi- 
enced. He  had  not  studied  the  question.  I  very 
much  doubt  whether  he  would  to-day  produce  a 
measure  so  foreign  to  his  published  intentions.  It 
is  a  matter  of  serious  import  that  such  a  man  as 
he  is  relegated  to  private  life  simply  because  one 
district  votes  for  another.  Our  custom  of  choosing 
only  Representatives  resident  in  the  district  loses  us 
many  invaluable  men.  Mr.  Wilson  is  to-day  capable 
of  performing  work  of  the  best  character,  because  he 
has  now  the  only  quality  he  lacked  before — knowl- 
edge of  affairs.  We  need  just  such  men  as  he  in  public 
life,  and  I  for  one  hope  for  his  speedy  return  to  it. 
Some  day  he  will  advocate  a  tariff,  I  believe,  upon 


WHAT  WOULD  I  DO  WITH  THE  TARIFF?  335 

the  floor  of  the  House,  which  will  tax  higher  the  luxur- 
ies of  the  few,  not  reduce  duties — solely  for  their 
benefit. 

Few  perhaps  understand  to  what  extent  foreign 
textile  articles  are  for  the  rich  only.  Take  woollen 
goods,  for  instance:  in  1890  the  value  of  the  home- 
manufactured  product  was  $338,000,000.  The  high- 
priced  foreign  fine  woollens  were  imported  to  the 
value  of  only  $35,500,000.  Their  value  per  yard  was 
much  greater  than  that  of  the  ordinary  qualities  pro- 
duced at  home,  so  that  the  number  of  yards  probably 
was  not  more  than  6  or  7  per  cent,  of  the  total  con- 
sumption. We  have  a  similar  result  with  cotton: 
the  value  of  the  home-manufactured  product  in  1890 
was  $268,000,000  and  the  total  amount  imported  was 
valued  at  only  $28,000,000.  Even  in  regard  to  silks 
imported,  the  manufactured  product  of  American 
mills  in  1890  was  valued  at  $69,000,000,  the  total  im- 
ported silk  manufactures  $31,000,000  only.  These 
also  are  of  much  higher  value  per  yard  than  the  home 
product.  Since  1 890  the  silk  manufacturers  of  America 
have  gained  greatly,  and  are  constantly  filling  the 
home  demands  more  completely. 

If  the  foreign  woollens,  silks,  and  linens  were  classi- 
fied as  to  fineness  and  value,  it  would  be  seen  that 
goods  of  common  grades,  such  as  the  people  generally 
use,  are  no  longer  imported.  Nor  can  they  be  to  any 
considerable  extent  even  under  the  present  act.     So 


336  THE    EMPIRE   OF    BUSINESS 

far  has  the  American  manufacturer  conquered  his 
own  market.  There  is  another  point  bearing  upon 
this  matter:  a  very  great  proportion  of  all  textile 
importations  consist  not  of  cloth  in  the  yard,  but  of 
special  fancy  textile  articles, — braids,  laces,  trim- 
mings, embroideries, — which  are  not  manufactured 
at  all  at  home. 

In  regard  to  coal  and  iron  ore,  so-called  raw  materi- 
als, the  new  tariff  should  make  no  further  reductions, 
because  a  reduction  of  nearly  one-half  of  the  duty  at 
one  time,  just  made,  is  serious,  and  time  is  needed 
before  any  industry  can  adjust  itself  to  so  great  a 
change.  Besides,  the  tax  of  forty  cents  per  ton  upon 
ore  and  thirty  cents  per  ton  upon  coal  is  comparatively 
trifling.  This  applies  to  iron  and  steel  generally, 
which  have  suffered  two  reductions  recently;  for  the 
McKinley  act  reduced  these  as  much  as  the  Wilson 
act  did — about  30  per  cent,  in  each  case.  Making 
cotton-ties  free  of  duty  when  all  other  forms  of  steel 
were  left  dutiable  is  the  greatest  blot  upon  the  present 
tariff — a  piece  of  pure  sectionalism,  the  bane  of  the 
Federal  system.  One-half  of  the  former  duty  should 
be  restored. 

Works  of  art  should  remain  free  of  duty,  and  the 
frames  of  pictures,  now  dutiable,  should  also  be  made 
free.  The  trifling  sums  levied  upon  these  at  present 
are  nothing ;  but  the  trouble  and  delay  caused  by  as- 
sessing the  value  of  each  frame  will  tend  to  discourage 


WHAT  WOULD  I  DO  WITH  THE  TARIFF?  337 

importations  of  art  treasures,  almost  all  of  which  find 
their  permanent  resting-place  sooner  or  later  in  public 
galleries,  and  thus  become  the  precious  possessions 
of  the  people 

One  important  point  in  the  tariff  receives  not  one 
tithe  of  the  attention  it  deserves — that  paragraph 
which  permits  all  parties  to  import  materials  and  to 
use  them  in  making  any  article  for  export.  Ninety- 
nme  per  cent,  of  all  duties  are  in  this  case  remitted. 
This  is  statesmanship  and  deserv^es  to  rank  with  rec- 
iprocity as  a  valuable  step  toward  securing  extended 
trade  for  the  Republic.  This  should  be  incorporated 
in  my  supposed  tariff,  except  that  I  should  remit  the 
remaining  i  per  cent,  also,  so  that  the  American  manu- 
facturer would  stand  free  to  avail  himself  of  the  mar- 
kets of  the  world,  for  what  he  purchases  for  export, 
upon  free-trade  terms,  and  thus  come  into  the  world's 
markets  with  what  he  has  to  sell  upon  equal  terms 
in  competition  with  the  manufacturers  of  Europe. 
When  writers  and  speakers  descant  upon  the  exclu- 
sion of  the  American  manufacturer  from  the  markets 
of  the  world  owing  to  protective  duties,  they  are  prob- 
ably ignorant  of  the  fact  that  at  present  he  is  under 
free-trade  conditions  as  to  his  materials,  minus  i  per 
cent,  of  the  duties  which  the  Government  withholds 
to  pay  the  cost  of  accounting  The  new  tariff  would 
disarm  criticism  upon  this  point  by  omitting  also  the 
trifling   i    per  cent.     American   manufacturers   would 


338  THE   EMPIRE   OF    BUSINESS 

then  have  every  advantage  of  free  trade  in  struggling^ 
for  the  markets  of  the  world. 

Such  qualities  of  foreign  wool  as  cannot  be  pro- 
duced in  our  country,  owing  to  climatic  causes,  and 
yet  are  valuable  for  mixtures  with  our  home  product, 
would  remain  free  of  duty. 

There  would  be  no  income  tax.  I  know  of  no 
statesman  or  authority  who  does  not  denounce  an  in- 
come tax  as  the  most  objectionable  of  all  taxes.  Mr. 
Gladstone  once  appealed  to  the  country  upon  this 
subject  alone,  denouncing  it  as  tending  to  make  a 
nation  of  liars.  While  it  is  in  theory  a  just  tax,  in 
practice  it  is  the  source  of  such  demoralization  as 
renders  it  perhaps  the  most  pernicious  form  of  taxa- 
tion which  has  ever  been  conceived  since  human 
society  has  settled  into  peaceful  government.  Any 
measure  is  justifiable  in  time  of  war,  but  the  only 
excuse  for  an  income  tax  is  imperative  necessity. 
There  is  at  present  no  such  necessity.  The  Govern- 
ment revenues  must  soon  produce  a  surplus  over  ex- 
penditures, if  from  no  other  cause  than  the  increase 
of  population  and  wealth,  and  they  can  be  made  to 
do  so  now,  as  previously  pointed  out,  by  taxing  higher 
only  the  extravagances  of  the  few. 

The  question  of  sugar  is  important.  Raw  sugar, 
molasses,  etc.,  would  be  taxed,  subject,  however,  to 
admitting  these  free  from  such  countries  as  give  us 
satisfactory  advantages  in  return,  which  would  practi- 


WHAT  WOULD  I  DO  WITH  THE  TARIFF?  339 

cally  make  them  all  free.  The  United  States  holds 
an  immense  power  in  her  use  of  $120,000,000  worth 
of  these  articles  annually,  purchased  chiefly  from 
our  sister  Republics  of  South  America,  and  from 
Cuba.  It  should  be  wisely  used  to  give  her  access 
to  their  markets  in  return  upon  better  terms  than 
other  nations.  A  bounty  upon  home-grown  sugar 
would  be  given  for  the  present  by  the  new  tariff  in  the 
hope  that  this  country  might  ultimately  succeed  in 
producing  its  own  supply.  The  beet-root  and  sorghum 
experiment  should  not  yet  be  abandoned. 

The  policy  of  reciprocity  would  be  restored  to  the 
fullest  extent.  The  increase  in  our  exports  of  articles 
to  coimtries  imder  reciprocity  treaties  proves  that 
Mr.  Blaine  was  correct  in  his  belief  that  by  means  of 
this  system,  ably  managed,  we  have  taken  the  best 
step  that  can  be  taken  to  give  our  country  foreign 
trade  which  it  cannot  otherwise  secure.  I  believe 
in  getting  something  in  return  from  countries  to 
which  we  open  our  markets  to  sugar,  molasses,  and 
tobacco,  because  we  have  proved  that  it  can  be  ob- 
tained. 

Although  I  am  opposed  to  taxing  the  food  and  the 
necessaries  of  the  people,  I  should  make  an  exception 
in  regard  to  products  of  Canada,  and  this  without  re- 
gard to  the  doctrines  of  cither  free-trade  or  protec- 
tion, but  as  a  matter  of  high  politics.  I  think  we 
betray  a  lack  of  statesmanship  in  allowing  commer- 


340  THE   EMPIRE   OF    BUSINESS 

cial  advantages  to  a  country  which  owes  allegiance 
to  a  foreign  power  founded  upon  monarchical  insti- 
tutions which  may  always  be  trusted  at  heart  to  detest 
the  Republican  idea.  If  Canada  were  free  and  inde- 
pendent and  threw  in  her  lot  with  this  continent,  it 
would  be  a  different  matter.  So  long  as  she  remains 
upon  our  flank  a  possible  foe,  not  upon  her  own  ac- 
count, but  subject  to  the  orders  of  a  European  Power, 
and  ready  to  be  called  by  that  Power  to  exert  her 
forces  against  us  even  upon  issues  that  may  not  con- 
cern Canada,  I  should  let  her  distinctly  understand 
that  we  view  her  as  a  menace  to  the  peace  and  security 
of  our  country,  and  I  should  treat  her  accordingly. 
She  should  not  be  in  the  Union  and  out  of  the  Union 
at  the  same  time,  if  I  could  prevent  it.  Therefore,  I 
should  tax  highly  all  her  products  entering  the  United 
States ;  and  this  I  should  do,  not  in  dislike  for  Canada 
but  for  love  of  her,  in  the  hope  that  it  would  cause 
her  to  realize  that  the  nations  upon  this  Continent 
are  expected  to  be  American  nations,  and,  I  trust, 
finally  one  nation  so  far  as  the  English-speaking 
portion  is  concerned.  I  should  use  the  rod  not  in 
anger  but  in  love ;  but  I  should  use  it.  She  should  be 
either  a  member  of  the  Republic,  or  she  should  stand 
for  her  own  self,  responsible  for  her  conduct  in  peace 
and  in  war,  as  other  nations  are  responsible,  and  she 
should  not  shield  herself  by  calling  to  her  aid  a  foreign 
Power.     This  is,   as   I   have   said,   neither  free-trade 


WHAT  WOULD  I  DO  WITH  THE  TARIFF  ?  341 

nor  protection,  but  it  does  bear  upon  the  subject  of 
the  tariff.  I  would  tax  Canadian  articles  so  long  as 
Canada  continued  the  subordinate  of  a  European 
Power. 

The  new  tariff  bill  should  provide  that  it  is  passed 
with  the  understanding  and  consent  of  both  political 
parties  that  no  further  tariff  legislation  should  be 
undertaken  for  ten  years.  Just  as  we  take  a  census 
every  ten  years,  we  should  revise  the  tariff,  say  the 
second  year  after  the  census  is  taken,  because  we 
could  then  act  understandingly.  If,  for  instance, 
the  imports  of  any  article  not  exclusively  used  by 
the  rich  few,  but  of  general  consumption,  compared 
with  the  amount  of  that  article  made  at  home,  proved 
that  the  home  manufacturer  had  almost  completely 
driven  the  foreign  manufacturer  out  of  our  market, 
the  duty  upon  that  article  could  be  reduced.  If,  on 
the  other  hand,  the  statistics  proved  that  the  imports 
of  a^;;,  ri,Tticle  had  remained  as  before  or  had  increased 
in  comparison  with  the  amount  of  the  production  at 
home,  the  duties  upon  that  article  could  be  increased. 
It  would  be  impossible  for  the  home  manufacturer 
or  the  foreign  importer  to  influence  the  decision,  be- 
cause we  should  have  the  figures  which  proved  the 
situation.  No  one  could  gainsay  them.  Of  course 
the  question  would  be  considered  whether  the  home 
X^roducer  had  shown  that  it  was  finally  possible  to 
produce  the  article  in   question  at  home  so  that   it 


.342  THE   EMPIRE   OF    BUSINESS 

could  ultimately  be  obtained  by  consumers  upon  favour- 
able terms  as  compared  with  those  obtainable  from 
foreign  sources.  If  a  committee,  appointed  for  the 
purpose  of  tariff  revision,  were  satisfied  that  the  manu- 
facture of  the  article  in  question  was  proved  not  suit- 
able for  this  part  of  the  world,  it  would  then  be  wise 
to  "protect"  it  no  longer  and  to  make  the  article  free 
of  duty,  or  to  tax  it  for  revenue  only. 

The  attitude  in  which  the  committee  should  ap- 
proach the  subject  of  revision  should  be  that  in  which 
a  lover  of  the  coimtry  approaches  the  question  of 
felling  a  tree.  It  should  consider  always,  as  I  know 
the  lover  of  the  country  considers,  how  easy  it  is  to 
cut  down  the  noble  tree  he  loves,  how  impossible  to 
restore  it.  It  matters  comparatively  little  to  the 
country  whether  there  be  5  or  lo  per  cent,  more  duty 
upon  a  foreign  article  for  a  few  years  than  required. 
But  it  makes  all  the  difference  whether  there  be  5  or 
10  per  cent,  less  than  is  necessary  to  enable  the  strug- 
gling home  manufacturer  to  continue  the  contest 
which  may  ultimately  result  in  victory.  In  tariff 
legislation,  the  rule  should  be,  in  all  cases  of  doubt, 
to  take  the  safe  side.  In  a  committee  devoted  to  this 
duty  there  would  seem  to  be  little  play  for  partisan- 
ship, as  its  functions  would  partake  of  a  judicial 
character.  The  end  aimed  at  by  all  would  be  to  ob- 
tain a  home  supply  of  such  articles  of  general  con- 
sumption as  can  finally  be  produced  under  the  flag, 
through  temporary  protection,   so  successfully  as  to 


WHAT  WOULD  I  DO  WITH  THE  TARIFF?  343 

supply  the  consumer  upon  terms  as  favourable  as  could 
be  obtained  if  dependent  upon  a  supply  from  any 
other  part  of  the  world.  Wherever  it  is  demonstrated 
that  the  United  States  cannot  produce  this  result  in 
regard  to  any  article,  then,  but  not  till  then,  should 
protection  be  abandoned,  and  revenue  only  consid- 
ered. With  articles,  however,  which  are  the  luxuries 
of  the  few,  upon  which  the  Wilson  bill  has  greatly  re- 
duced duties,  I  hold  that  neither  free-trade  nor  pro- 
tection should  have  anything  to  do.  Upon  these  the 
tax  should  be  excessively  high,  solely  for  revenue — 
high  to  the  point  of  almost  lessening  the  aggregat6 
revenue  collectible  upon  them;  and  no  other  consid- 
eration should  have  weight  in  levying  the  duties,  for 
revenue  is  the  end  desired. 

I  am  confident  that  this  point  will  not  be  reached  be- 
fore the  present  tariff  rates  are  doubled  on  those  things 
which  have  been  enumerated  as  luxuries,  which  yield 
two-thirds  of  all  tariff  revenue;  and  I  am  equally  cer- 
tain that  Secretary  Carlisle's  belief  that  the  lower 
duties  of  the  Wilson  act  upon  these  articles  for  the 
few  will  greatly  increase  their  use  is  a  mistake.  The 
consumption  of  the  luxuries  of  the  rich  can  be  in- 
creased or  diminished  by  any  change  of  duties  only 
to  a  degree  so  slight  as  to  surprise  theorists,  because 
their  cost  is  not  the  first  consideration. 

To  sum  up — 

First:  Duties  should  be  collected  chiefly  from 
foreign   luxuries   used   by   the   extravagant   rich   cLiss 


344  THE    EMPIRE    OF    BUSINESS 

without  regard  to  free  trade  or  protection,  but  pri- 
marily for  revenue.  These  luxuries  embrace  two- 
thirds  of  all  tariff  revenue. 

Second:  There  should  be  no  income  tax  in  a  time 
of  peace. 

Third:  Established  industries  should  not  be  sub- 
jected frequently  to  violent  changes  but  should  be 
given  time  to  adjust  themselves  to  new  conditions. 
A  reduction  of  more  than  one-half  of  the  duty  at  one 
time  upon  an  article  is  inexpedient  and  even  danger- 
ous. 

Fourth:  Reciprocity,  judging  from  what  has  al- 
ready been  done,  is  the  best  step  that  can  be  taken 
to  extend  our  foreign  trade,  and  the  policy  should  be 
restored. 

Fifth :  The  boimty  upon  home-grown  sugar  should 
not  yet  be  abandoned,  for  it  is  not  yet  proved  con- 
clusively that  the  growth  of  beet  and  sorghum  sugar  can- 
not finally  be  developed  sufficiently  to  give  us  a  home 
supply  upon  favourable  terms. 

Sixth:  Such  wool  as  we  cannot  produce  at  home 
and  yet  is  required  for  mixture,  should  be  free  of 
duty. 

Seventh :  Art  of  all  kinds  should  be  free,  because 
art  treasures  inevitably  flow  into  public  institutions 
sooner  or  later. 

Eighth:  The  tariff  once  settled,  there  should  be 
tariff  legislation  only  in  the  second  year  after  each 


WHAT  WOULD  I  DO  WITH  THE  TARIFF?  345 

census,  except  in  an  emergency  like  the  present,  when 
a  deficiency  in  the  national  revenues  and  sound  policy 
require  additional  sums  to  be  collected  from  such  im- 
ports as  are  luxuries  of  the  extravagant  rich,  and  not 
the  necessaries  of  life  of  the  frugal  poor. 

Such  would  be  a  tariff  in  favour  of  the  toiling  masses, 
and  for  those  who  live  frugal  and  unostentatious  lives. 
Neither  protectionist  nor  free  trader,  as  such,  could 
claim  it,  because  it  would  be  framed  in  the  interest 
of  neither  idea,  but  primarily  with  a  view  to  revenue, 
and  upon  the  theory  that  to  raise  this  from  the  foreign 
luxuries  of  the  extravagant  rich  class  is  best  for  the 
people  in  general.  Under  such  a  policy,  the  tariff 
would  be  substantially  taken  out  of  politics  and  treated 
as  a  business  question,  and  if  periods  of  ten  years' 
rest  from  tariff  legislation  are  permitted,  I  believe  the 
country  would  soon  rally  and  begin  its  march  toward 
the  state  of  prosperity — as  far  as  tariff  policy  can  be 
made  to  accelerate  that  longed-for  march — which 
characterized  the  decade  between  1880  and  1890, 
during  which  its  most  marvellous  development  took 
place, — a  decade  which  is  probably  to  rank  as  the 
Golden  Age  of  the  Republic,  as  far  as  material  pros- 
perity is  concerned. 


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